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Fear the Evil Eye

Author

Listed:
  • Daniel John Zizzo
Abstract
This paper presents the results of an experiment where people can reduce (`burn`) other subjects` money at a cost to their own, with the decisions of one of them (randomly chosen after all decisions are made) getting implemented to determine final winnings. Almost 50% of the subjects engage in money burning, eliminating some 23% of the earnings of the other subjects. The price elasticity of burning is estimated, and found to be less than one up to a lower boundary price of about 0.22. Three subjects out of four appear rank egalitarian, providing support to theories of interdependent preferences that predict that agents care about how money is divided among other agents. Relatively poor and disadvantaged agents burn at least as much as the others. Overall, money burning appears a genuine phenomenon, mirroring the institutional realities of some transition and underdeveloped economies where `the evil eye` can induce behaviour closely resembling money burning, and which may hinder economic growth. Some implications for developed countries are also discussed.

Suggested Citation

  • Daniel John Zizzo, 2002. "Fear the Evil Eye," Economics Series Working Papers 91, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:91
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    File URL: https://ora.ox.ac.uk/objects/uuid:7db45247-cbf0-4d21-b5be-c016a5a950b3
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    Citations

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    Cited by:

    1. Zizzo, Daniel John, 2003. "Money burning and rank egalitarianism with random dictators," Economics Letters, Elsevier, vol. 81(2), pages 263-266, November.
    2. Müller, Julia & Schwieren, Christiane & Spitzer, Florian, 2016. "What Drives Destruction? On the Malleability of Anti-Social Behavior," Department of Economics Working Paper Series 238, WU Vienna University of Economics and Business.
    3. Müller, Julia & Schwieren, Christiane & Spitzer, Florian, 2022. "How to prevent destruction – On the malleability of anti-social behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    4. Zeballos, Eliana, 2015. "Getting a Leg Up or Pulling it Down? Interpersonal Comparisons and Destructive Actions: Experimental Evidence from Bolivia," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205660, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    consumer choice; money burning; envy; egalitarianism;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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