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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, p. 201-212Article 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, p. 201-212
National Category
Economics
Identifiers
URN: urn:nbn:se:uu:diva-323452DOI: 10.1162/REST_a_00623ISI: 000400676700002OAI: oai:DiVA.org:uu-323452DiVA, id: 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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Karadja, Mounir

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