The Role of Expectations and Gender in Altruism

December 29, 2009

University of Michigan professors Mary L. Rigdon and Adam Seth Levine have a new paper that studies whether there is a systematic gender difference in giving behavior:

Most experimental economics research has found that women are more generous than men. Evidence also suggests that gender differences depend upon the price of giving: males are more altruistic when the price of giving is low, while females are more altruistic when the price of giving is high. However, in the modified dictator game, a key variable in one’s decision to give is what one expects to receive. Systematic differences in those expectations may well contribute to systematic differences in altruistic behavior. We show that these expectations drive an important and widely reported result. When these expectations are homegrown, we replicate the finding. When expectations of receiving are uniform rather than homegrown, gender differences in price sensitivity disappear: males and females give equal amounts. This suggests that it is gender differences in expectations about others’ giving — not differences in tastes for fairness — that explains the previous results.


Workers in Expensive Cities Pay a Disproportionate Share of Federal Taxes

September 2, 2009

A new study in the Journal of Political Economy by University of Michigan economist David Albouy finds that workers in expensive cities pay a disproportionate share of federal taxes. Overall, city residents pay 27 percent more in federal taxes than workers with similar skills in small cities or rural areas. According to the study:

In the United States, workers in cities offering above-average wages—cities with high productivity, low quality of life, or inefficient housing sectors—pay 27 percent more in federal taxes than otherwise identical workers in cities offering below-average wages. According to simulation results, taxes lower long-run employment levels in high-wage areas by 13 percent and land and housing prices by 21 and 5 percent, causing locational inefficiencies costing 0.23 percent of income, or $28 billion in 2008. Employment is shifted from north to south and from urban to rural areas. Tax deductions index taxes partially to local cost of living, improving locational efficiency.

HT: Richard Florida

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