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Effect of social capital on income distribution preferences: comparison of neighborhood externality between high- and low-income households

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  • Yamamura, Eiji

Abstract

This paper explores how individual preferences for income redistribution are influenced by social capital, which is measured by rates of participation in community activities. I combined individual-level data and place of residence data to examine how social capital accumulated in residential areas influences an individual’s preference for income redistribution. After controlling for individual characteristics, I obtained the following key findings: people are more likely to prefer income redistribution in areas with higher rates of community participation. This tendency is more clearly observed in high-income groups than in low-income groups. This implies that one’s preference for income redistribution is influenced by psychological externalities.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32557.

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Date of creation: 24 Jul 2011
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Handle: RePEc:pra:mprapa:32557

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Keywords: Redistribution; Social capital; Inequality; Externality;

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Cited by:
  1. Eiji Yamamura, 2012. "Charitable giving under inequality aversion and social capital," Economics Bulletin, AccessEcon, vol. 32(4), pages 3140-3147.

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