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Richer (and Holier) Than Thou?: The Effect of Relative Income Improvements on Demand for Redistribution
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Humboldt Univ, Berlin, Germany.;German Inst Econ Res DIW, Berlin, Germany.;Res Inst Ind Econ, Stockholm, Sweden..
Res Inst Ind Econ, Stockholm, Sweden.;Stockholm Univ, Dept Econ, CEPR, Stockholm, Sweden..
2017 (English)In: Review of Economics and Statistics, ISSN 0034-6535, E-ISSN 1530-9142, Vol. 99, no 2, 201-212 p.Article in journal (Refereed) Published
Abstract [en]

We use a tailor-made survey on a Swedish sample to investigate how individuals' relative income affects their demand for redistribution. We first document that a majority misperceive their position in the income distribution and believe that they are poorer, relative to others, than they actually are. We then inform a subsample about their true relative income and find that individuals who are richer than they initially thought demand less redistribution. This result is driven by individuals with prior right-of-center political preferences who view taxes as distortive and believe that effort, rather than luck, drives individual economic success.

Place, publisher, year, edition, pages
2017. Vol. 99, no 2, 201-212 p.
National Category
Economics
Identifiers
URN: urn:nbn:se:uu:diva-323452DOI: 10.1162/REST_a_00623ISI: 000400676700002OAI: oai:DiVA.org:uu-323452DiVA: diva2:1119650
Funder
Ragnar Söderbergs stiftelseThe Royal Swedish Academy of Sciences
Available from: 2017-07-04 Created: 2017-07-04 Last updated: 2017-07-04Bibliographically approved

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