nep-lam New Economics Papers
on Central and South America
Issue of 2021‒12‒06
two papers chosen by

  1. Dissecting Inequality-Averse Preferences By Bergolo, Marcelo; Burdin, Gabriel; Burone, Santiago; De Rosa, Mauricio; Giaccobasso, Matias; Leites, Martin
  2. COVID-19 in Latin America: A High Toll on Lives and Livelihoods By Carlos Goncalves; Mr. Bas B. Bakker

  1. By: Bergolo, Marcelo (IECON, Universidad de la República); Burdin, Gabriel (Leeds University Business School); Burone, Santiago (University of Antwerp); De Rosa, Mauricio (Universidad de la República, Uruguay); Giaccobasso, Matias (University of California, Los Angeles); Leites, Martin (Universidad de la República, Uruguay)
    Abstract: Although different approaches and methods have been used to measure inequality aversion, there remains no consensus about its drivers at the individual level. We conducted an experiment on a sample of more than 1800 first-year undergraduate economics and business students in Uruguay to understand why people are inequality averse. We elicited inequality aversion by asking participants to make a sequence of choices between hypothetical societies characterized by varying levels of average income and income inequality. In addition, we use randomized information treatments to prime participants into competing narratives regarding the sources of inequality in society. The main findings are that (1) the prevalence of inequality aversion is high: most participants' choices revealed inequality-averse preferences; (2) the extent of inequality aversion depends on the individual's position in the income distribution; (3) individuals are more likely to accept inequality when it comes from effort rather than luck regardless of their income position; (4) the effect of social mobility on inequality aversion is conditional on individual's income position: preferences for mobility reduces inequality aversion for individuals located at the bottom of the income distribution, where risk aversion cannot play any role.
    Keywords: inequality aversion, fairness, risk, effort, luck, redistribution, questionnaire-experiments
    JEL: D63 D64 D81 C13 C91
    Date: 2021–11
  2. By: Carlos Goncalves; Mr. Bas B. Bakker
    Abstract: Latin America was hit hard by Covid-19, both in terms of lives and livelihoods. Early lockdowns in the second quarter of 2020 prevented an explosion of deaths at the time but did not stop the pandemic from later wreaking havoc in the region. This paper investigates the dynamics of pandemics in Latin America and how it differed from elsewhere. We probe the role of non-pharmaceutical interventions; the effectiveness (or lack of thereof) lock-downs in Latin America; which structural factors contributed to the high death toll in Latin America, and the extent to which the epidemic harmed the economy. Finally, we briefly analyze the roots of the second-waves that started in the fourth quarter of 2020.
    Keywords: later lockdown; dynamics of Covid-19 epidemic; lock-downs in Latin America; modeling lockdown type; lockdowns in Latin America; COVID-19; South America; Caribbean; Europe; Western Europe; Asia and Pacific
    Date: 2021–06–11

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