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Local exposure to inequality raises support of people of low wealth for taxing the wealthy

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  • Melissa L. Sands

    (University of California)

  • Daniel de Kadt

    (University of California)

Abstract

Psychological research shows that social comparison of individuals with peers or others shapes attitude formation1,2. Opportunities for such comparisons have increased with global inequality3,4; everyday experiences can make economic disparities more salient through signals of social class5,6. Here we show that, among individuals with a lower socioeconomic status, such local exposure to inequality drives support for the redistribution of wealth. We designed a placebo-controlled field experiment conducted in South African neighbourhoods in which individuals with a low socioeconomic status encountered real-world reminders of inequality through the randomized presence of a high-status car. Pedestrians were asked to sign a petition to increase taxes on wealthy individuals to help with the redistribution of wealth. We found an increase of eleven percentage points in the probability of signing the petition in the presence of inequality, when taking into account the experimental placebo effect. The placebo effect suppresses the probability that an individual signs the petition in general, which is consistent with evidence that upward social comparison reduces political efficacy4. Measures of economic inequality were constructed at the neighbourhood level and connected to a survey of individuals with a low socioeconomic status. We found that local exposure to inequality was positively associated with support for a tax on wealthy individuals to address economic disparities. Inequality seems to affect preferences for the redistribution of wealth through local exposure. However, our results indicate that inequality may also suppress participation; the political implications of our findings at regional or country-wide scales therefore remain uncertain.

Suggested Citation

  • Melissa L. Sands & Daniel de Kadt, 2020. "Local exposure to inequality raises support of people of low wealth for taxing the wealthy," Nature, Nature, vol. 586(7828), pages 257-261, October.
    • Handle: RePEc:nat:nature:v:586:y:2020:i:7828:d:10.1038_s41586-020-2763-1
    DOI: 10.1038/s41586-020-2763-1
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    Cited by:

    1. Markussen, Thomas & Sharma, Smriti & Singhal, Saurabh & Tarp, Finn, 2021. "Inequality, institutions and cooperation," European Economic Review, Elsevier, vol. 138(C).
    2. Christian T. Elbæk & Panagiotis Mitkidis & Lene Aarøe & Tobias Otterbring, 2023. "Subjective socioeconomic status and income inequality are associated with self-reported morality across 67 countries," Nature Communications, Nature, vol. 14(1), pages 1-14, December.
    3. Eugenio Levi & Abhijit Ramalingam, 2023. "Absolute vs. relative poverty and wealth: Cooperation in the presence of between-group inequality," MUNI ECON Working Papers 2023-09, Masaryk University.
    4. Martinangeli, Andrea F.M. & Windsteiger, Lisa, 2023. "Immigration vs. poverty: Causal impact on demand for redistribution in a survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    5. Wright, Reilly & Aldama, Abraham, 2023. "Not all luck is created equal: Sources of income inequality and willingness to redistribute," Journal of Economic Psychology, Elsevier, vol. 97(C).
    6. Maurice Dunaiski & Janne Tukiainen, 2023. "Does income transparency affect support for redistribution? Evidence from Finland's tax day," Discussion Papers 159, Aboa Centre for Economics.
    7. Suss, Joel, 2023. "Measuring local, salient economic inequality in the UK," LSE Research Online Documents on Economics 117884, London School of Economics and Political Science, LSE Library.
    8. Windsteiger, Lisa, 2022. "The redistributive consequences of segregation and misperceptions," European Economic Review, Elsevier, vol. 144(C).
    9. Anna Hochleitner, 2022. "Fairness in times of crisis: Negative shocks, relative income and preferences for redistribution," Discussion Papers 2022-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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