Endowment inequality in public goods games: A re-examination

- Presents a clean test of the effects of endowment inequality in public goods games.
- Control for possible wealth or endowment effects at the individual.
- Inequality has an adverse effect since rich lower contributions in the face of inequality.
- The rich always contribute less than do the poor.
- The effect is robust to different endowments at the group level.

We present a clean test of whether inequality in endowments affects contributions to a public good. It is a clean test because, to our knowledge, it is the first to control for possible endowment effects. We find that the key adverse effect of inequality arises because the rich reduce their contributions when there is inequality.