The trade-off between welfare and equality in a public good experiment

We report the results of an experiment on voluntary contributions to a public good in which we implement a redistribution of the group endowment among group members in a lump sum manner. We study the impact of redistribution on group contribution, on individuals' contributions according to their endowment and on welfare. Our experimental results show that welfare increases when equality is broken, as predicted by theory (Itaya et al. in, Econ Lett 57:289-296, 1997), because the larger contribution of the rich subjects overcompensates the lower contribution of the poor subjects. However, our data suggest that the adjustment of individual contributions after redistribution is not always compatible with the predictions. In particular, subjects who become poor contribute much less than subjects who were poor since the beginning.