Fairness in the economy
11 insights from the cutting edge of research into how people think about fairness and inequality, from a recent workshop at the University of Bristol
The BÆM Meeting on Fairness in the Economy brought together eleven speakers across a single intensive day at the University of Bristol in May 2026. Speakers from Zurich, Bergen, St Gallen, Oslo, Amsterdam, LSE, Princeton, Berlin and Cambridge presented the latest evidence on what people believe about the causes and consequences of economic inequality and how it relates to fairness considerations, and how those beliefs shape policy preferences. The findings are a gold mine for researchers, policymakers, journalists and campaigners alike.
The usual debates about equity versus efficiency or the size of the state barely surfaced. What came through instead was a more textured picture: a public that cares about consequences as much as about justice, that reads inequality through whatever lens its media offers, that accepts inherited wealth as partially fair, and that is losing faith in the state’s ability to fix any of it.
This workshop was organised by Paul Hufe at the University of Bristol, with funding from an UKRI Future Leaders Fellowship (ref MR/X033333/1), as part of a series of Bristol Applied Economics Meetings. The titles of sessions have been simplified – see the workshop programme for the actual titles used. The research presented at the workshop is all ‘live’ and yet to be published, so we cannot provide links to more information on the specific research projects mentioned below, but you can click on a presenter’s name for more information about their overarching research.
Ernst Fehr (Zurich): What do laboratory measures tell us about the real world?
For decades, economists have used simple lab games to measure how much people care about others. Fehr (with Epper and Senn) builds on his seminal 1999 paper with Schmidt (A Theory of Fairness, Competition, and Cooperation) to show that most studies into the effect of social preferences on economic outcomes have only looked at one half of the picture. Many studies use a classic ‘dictator game’ design to measure altruism and social preferences, where one player (the dictator) decides how to split an amount of money with a second player (the recipient) who has no input into the decision. Most studies of this kind measure altruism without differentiating between ‘aheadness aversion’ (whether people dislike being far ahead of others) and ‘behindness aversion’ (whether people also dislike being far behind others). However, when you measure both, you find that people who dislike being ahead of others tend to be less concerned about being behind others, and vice versa – the two are negatively correlated. Properly understanding this has important implications for understanding how people think about contributing to society versus their own financial insecurity, which has consequences for real-world behaviours such what jobs people choose, what causes they donate to, and how they vote.
Morten Støstad (NHH Bergen): Why we really redistribute
Why do some countries tax more and redistribute more than others? The usual answer is that some societies are simply more fair-minded. Støstad analysed surveys of 92,000 people across 40 countries and found something else going on. The countries who redistribute most – such as Nordic countries - are not necessarily the most altruistic. They are the ones who believe that inequality damages society, by undermining trust, fuelling crime, weakening cohesion or slowing growth. He calls this “self-preserving redistribution.” About 77% of respondents agree that economic inequality leads to social unrest. Globally, around 48% redistribute for fairness reasons and 23% redistribute for self-preserving reasons (more in the Nordics). The Nordics, in other words, are not unusually generous; rather, they are unusually worried about what unchecked inequality might do. The other implication is that consequentialist arguments - that inequality has measurable negative impacts - may be more politically effective than fairness-based ones in winning the argument for action on inequality.
Paolo Piacquadio (St Gallen): Why position matters more than money
How much economic efficiency are people prepared to give up in order to make their country more equal? Piacquadio (with Bos, Drupp and Groth-Pettersen) designed an experiment where participants chose income for themselves and a group of others, allowing them to separate people’s altruistic concern for others from their views on redistribution. The most striking finding is that when people care about inequality, they care more about who is ranked above or below them than about how much money separates them. Climbing or falling in the ranking matters more than the absolute size of the gap. Economists usually ignore rank-based concerns. Piacquadio argues they shouldn’t, because these concerns shape how people actually feel about a society’s distribution.
Ranveig Falch (Oslo): When is selfishness OK?
Falch (with Cappelen, Sørensen and Tungodden) asked 14,000 Americans and Scandinavians whether it is morally acceptable to put your own interests first. Almost nobody thinks pure self-interest is fine, but almost everyone thinks some prioritisation of your own interests is acceptable. The justifications fall into two camps: an invisible-hand argument (self-interest serves the wider good) and a reciprocity argument (others are selfish, so I can be too). Strip those justifications away, for instance in a simple ‘dictator game’ where one person decides what to share with another, and most people switch to disapproval. Context matters: self-interest is more acceptable in markets and voting than in family life or the workplace. Americans are more tolerant of self-interest overall, except — surprisingly — in markets and voting, where Scandinavians are more tolerant.
Joël van der Weele (Amsterdam): How you measure inequality changes what people think about it
The same level of inequality can be described in multiple ways. Common examples are the Gini coefficient (a single statistical measure of the level of inequality in a country), the share of income held by the top 10%, the share held by the bottom 40%, and the Palma ratio (comparing the top 10% share with the bottom 40% share). Van der Weele (with Sund and Siniakova) shows that the choice of which metric to use when describing the level of inequality in a country has a bearing on how people think about the issue. People who hear about the top 10% share think inequality is higher, less fair, and more in need of correction. People who hear the Gini think the opposite. The effect is roughly the same size as noticeable differences in the level of inequality between countries. Experts are not immune to their perceptions of inequality being influenced by the choice of inequality metric. A media analysis across eight countries found that left-leaning outlets prefer to talk about top income shares, whereas right-leaning outlets reach for the Gini. Some of the political divide over inequality may therefore be a statistical artefact.
Paolo Brunori (LSE): What people believe about inequality has little to do with what reality
Brunori (with Hunewaldt) looked at survey data across European countries and compared what people think about inequality of opportunity to what economists actually measure. The two barely match. Perceived inequality of opportunity has been rising over time; actual inequality of opportunity, by most measures, has not. People who feel inequality is unfair tend to support redistribution, but those feelings may be shaped by personal experience more than by actual economic conditions. Although Europeans feel more strongly that opportunity is unequal, support for redistribution is falling. The likely reason is not that the public no longer cares, but that people are losing confidence that government can actually do anything useful about it. And correcting people’s misperceptions of their own position does not necessarily change their level of support for redistribution.
Magdalena Wasilewska (Amsterdam): The stories we tell about inequality
When you ask Dutch citizens to explain why some people are rich and others are poor, about 62% point to structural causes (the labour market, the tax system), 26% point to personal effort, and 16% to luck. Wasilewska (with Douenne, Sund and van der Weele) finds that the structural explanation is more common among women, the more educated, and the left-leaning. Telling people a different story – for example, that success is mostly about hard work, or that it is mostly about family background - does shift their views about meritocracy, but has little impact on their support for redistribution. People are also very good at picking out the explanations that fit what they already believe. So the chicken-and-egg question is left open: do the stories we hear shape our beliefs about fairness, or do our beliefs determine which stories we accept?
Ingvild Almås (Zurich): Measuring unfair inequality, not just inequality
Most measures of inequality (like the Gini) ignore an important question: was the inequality earned fairly or not? Almås (with Hufe and Weishaar) is building a new measure that puts this question front and centre. People are asked to look at imaginary mini-societies, estimate the size and income of different demographic groups, and to say what each group’s fair income would be. The gap between fair and actual income becomes the new measure of unfair inequality. A US pilot with 2,300 people found that Americans underestimate both inequality and unfairness, but believe there is more unfairness than inequality. That implies either that there is a degree of perceived unfair equality (i.e. some people being compensated more than others think that they deserve to be), or that the wrong people are being compensated. Americans, on average, would give up 8% of their perceived income to live in a fairer society. The research is now being rolled out to 35+ countries.
Roland Bénabou (Princeton): When do good ends justify bad means?
Most behavioural economics focuses on how people balance their own interests against others’ interests. Bénabou (with Henkel and Falk) tackles a harder question: how do people balance ends against means? They asked 500 participants to make five decisions, including whether they would lie for a good cause or pay a bribe to achieve the right outcome. They found that between 20% and 44% of people refused to subordinate means to ends across the various tasks, preferring to act in the ‘right’ way even if it came at the cost of the best result, but a majority were prepared to act more nefariously to achieve a good outcome. Strikingly, almost no one was consistently Kantian (means-respecting) or consequentialist (ends-justifying). People shift their answers depending on the scenario, which is unusual; when economists study self-versus-other choices, individual behaviour is much more stable. And the means-respecting people are not more “moral” overall: their refusal in to subjugate means to ends does not predict their generosity in standard sharing games.
Simona Sartor (HU Berlin): Inheritance, luck, and “aristocratic meritocracy”
If hard work deserves a reward, what about your parents’ hard work? Sartor’s experiments in the US put participants into the role of social planner and ask how much tax should be applied to income from four sources: people’s luck, their own hard work, inherited wealth that arrives by random chance, and inherited wealth that comes from their family’s hard work. She calls the result “aristocratic meritocracy”: people who think that hard work should be rewarded and not highly taxed also think that this holds true if the hard work was done by the parents of the person in question. In other words, people think that inherited wealth is at least partially deserved. This holds even when the role of luck is made obvious to participants, and despite the fact that respondents identified birth circumstances, family background, genetics and personal traits as among the most luck-driven factors in life. Plug the implied preferences into an optimal-tax model and the ‘fair’ rate of US inheritance tax should be about 41%, far below the 65% that a strictly meritocratic view would imply, and remarkably close to the 40% top rate of inheritance tax that applies in the US today.
Kristoffer Berg (Cambridge): What kind of meritocracy do we want?
Berg (with Håvarstein and Stubhaug) asks: if we want a tax system that holds people responsible for their merits but not their circumstances, what do we even mean by merit? He presents two alternatives. The strict version says that only the part of income that cannot be explained by circumstances should count as merit. The looser version says that the part explained purely by merit counts, even if circumstances would have predicted it too. Looking at Norwegian wages, the strict version finds that only 15% of wages are due to merit; the looser version finds that 40% of wages can be attributed to merit. Building this into a standard optimal-tax model produces very different policies: the strict version calls for more progressive taxes than a pure utilitarian benchmark, while the looser version calls for less progressive ones. Either way, meritocracy as measured has been rising in Norway since 1958.