IDEAS home Printed from https://ideas.repec.org/a/wly/fistud/v46y2025i3p373-397.html

Policy misperceptions, information, and the demand for redistributive tax reform: experimental evidence from Latin America

Author

Listed:
  • Martín Ardanaz
  • Evelyne Hübscher
  • Philip Keefer
  • Thomas Sattler

Abstract

Why do individuals fail to support tax reforms that serve their material self‐interest? Using an original online survey experiment spanning eight countries and 12,000 respondents across Latin America, one of the most unequal regions in the world, we find evidence for a previously unexplored explanation: misperceptions regarding the current incidence of the taxes to be reformed. Treated respondents who are informed that the value‐added tax (VAT) is regressive are significantly more likely to prefer reforms that make it more progressive. Treatment effects are driven by the large fraction of respondents who underestimate the regressivity of the VAT. They are disproportionately right‐leaning and more likely to attribute success to individual effort than luck; treatment effects are largest among individuals who hold these views of the world. Many respondents exhibit inconsistent preferences, violating the generalised axiom of revealed preferences; treatment effects are significantly stronger among consistent respondents. These findings expand the potential for information interventions to shift support for fiscal policy reforms protecting the most vulnerable.

Suggested Citation

  • Martín Ardanaz & Evelyne Hübscher & Philip Keefer & Thomas Sattler, 2025. "Policy misperceptions, information, and the demand for redistributive tax reform: experimental evidence from Latin America," Fiscal Studies, John Wiley & Sons, vol. 46(3), pages 373-397, September.
    • Handle: RePEc:wly:fistud:v:46:y:2025:i:3:p:373-397
    DOI: 10.1111/1475-5890.70001
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1475-5890.70001
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1475-5890.70001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alberto Alesina & Armando Miano & Stefanie Stantcheva, 2023. "Immigration and Redistribution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(1), pages 1-39.
    2. Slemrod, Joel, 2006. "The Role of Misconceptions in Support for Regressive Tax Reform," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(1), pages 57-75, March.
    3. Mummolo, Jonathan & Peterson, Erik, 2019. "Demand Effects in Survey Experiments: An Empirical Assessment," American Political Science Review, Cambridge University Press, vol. 113(2), pages 517-529, May.
    4. Christopher Hoy & Franziska Mager, 2021. "Why Are Relatively Poor People Not More Supportive of Redistribution? Evidence from a Randomized Survey Experiment across Ten Countries," American Economic Journal: Economic Policy, American Economic Association, vol. 13(4), pages 299-328, November.
    5. de Bresser, Jochem & Knoef, Marike, 2022. "Eliciting preferences for income redistribution: A new survey item," Journal of Public Economics, Elsevier, vol. 214(C).
    6. Roland Bénabou & Jean Tirole, 2016. "Mindful Economics: The Production, Consumption, and Value of Beliefs," Journal of Economic Perspectives, American Economic Association, vol. 30(3), pages 141-164, Summer.
    7. Gilbert E. Metcalf, 1994. "Lifecycle vs. Annual Perspectives on the Incidence of A Value Added Tax," NBER Working Papers 4619, National Bureau of Economic Research, Inc.
    8. Mounir Karadja & Johanna Mollerstrom & David Seim, 2017. "Richer (and Holier) Than Thou? The Effect of Relative Income Improvements on Demand for Redistribution," The Review of Economics and Statistics, MIT Press, vol. 99(2), pages 201-212, May.
    9. Ilyana Kuziemko & Michael I. Norton & Emmanuel Saez & Stefanie Stantcheva, 2015. "How Elastic Are Preferences for Redistribution? Evidence from Randomized Survey Experiments," American Economic Review, American Economic Association, vol. 105(4), pages 1478-1508, April.
    10. Raymond Fisman & Shachar Kariv & Daniel Markovits, 2007. "Individual Preferences for Giving," American Economic Review, American Economic Association, vol. 97(5), pages 1858-1876, December.
    11. Fernández-Albertos, José & Kuo, Alexander, 2018. "Income Perception, Information, and Progressive Taxation: Evidence from a Survey Experiment," Political Science Research and Methods, Cambridge University Press, vol. 6(1), pages 83-110, January.
    12. Alberto Alesina & Stefanie Stantcheva & Edoardo Teso, 2018. "Intergenerational Mobility and Preferences for Redistribution," American Economic Review, American Economic Association, vol. 108(2), pages 521-554, February.
    13. Dietmar Fehr & Johanna Mollerstrom & Ricardo Perez-Truglia, 2022. "Your Place in the World: Relative Income and Global Inequality," American Economic Journal: Economic Policy, American Economic Association, vol. 14(4), pages 232-268, November.
    14. Cruces, Guillermo & Perez-Truglia, Ricardo & Tetaz, Martin, 2013. "Biased perceptions of income distribution and preferences for redistribution: Evidence from a survey experiment," Journal of Public Economics, Elsevier, vol. 98(C), pages 100-112.
    15. Fisman, Raymond & Gladstone, Keith & Kuziemko, Ilyana & Naidu, Suresh, 2020. "Do Americans want to tax wealth? Evidence from online surveys," Journal of Public Economics, Elsevier, vol. 188(C).
    16. Pierre Bachas & Lucie Gadenne & Anders Jensen, 2024. "Informality, Consumption Taxes, and Redistribution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(5), pages 2604-2634.
    17. Spencer Bastani & Daniel Waldenström, 2021. "Perceptions of Inherited Wealth and the Support for Inheritance Taxation," Economica, London School of Economics and Political Science, vol. 88(350), pages 532-569, April.
    18. Jonathan de Quidt & Johannes Haushofer & Christopher Roth, 2018. "Measuring and Bounding Experimenter Demand," American Economic Review, American Economic Association, vol. 108(11), pages 3266-3302, November.
    19. Krupnikov, Yanna & Levine, Adam Seth & Lupia, Arthur & Prior, Markus, 2006. "Public Ignorance and Estate Tax Repeal: The Effect of Partisan Differences and Survey Incentives," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(3), pages 425-437, September.
    20. Stefanie Stantcheva, 2021. "Understanding Tax Policy: How do People Reason?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2309-2369.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Günther, Isabel & Martorano, Bruno, 2025. "Inequality, social mobility and redistributive preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 229(C).
    2. Ardanaz, Martín & Hübscher, Evelyne & Keefer, Philip & Sattler, Thomas, 2022. "Policy Misperceptions, Information, and the Demand for Redistributive Tax Reform: Experimental Evidence from Latin American Countries," IDB Publications (Working Papers) 12607, Inter-American Development Bank.
    3. Hope, David & Limberg, Julian & Weber, Nina, 2023. "Why do (some) ordinary Americans support tax cuts for the rich? Evidence from a randomised survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    4. Hope, David & Limberg, Julian & Weber, Nina Sophie, 2021. "Why Do (Some) Ordinary Americans Support Tax Cuts for the Rich? Evidence From a Randomized Survey Experiment," SocArXiv chk9b, Center for Open Science.
    5. Riccardo Bruni & Alessandro Gioffré & Maria Marino, 2025. "In‐group bias in preferences for redistribution: a survey experiment in Italy," Economica, London School of Economics and Political Science, vol. 92(367), pages 1009-1080, July.
    6. Ingar Haaland & Christopher Roth & Johannes Wohlfart, 2023. "Designing Information Provision Experiments," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 3-40, March.
    7. Bonnet, Julien & Ciani, Emanuele & Grimalda, Gianluca & Murtin, Fabrice & Pipke, David, 2025. "What explains preferences for redistribution? Evidence from an international survey," European Economic Review, Elsevier, vol. 180(C).
    8. repec:osf:socarx:chk9b_v1 is not listed on IDEAS
    9. Francesco Capozza & Ingar Haaland & Christopher Roth & Johannes Wohlfart, 2021. "Studying Information Acquisition in the Field: A Practical Guide and Review," CEBI working paper series 21-15, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    10. Lasse J. Jessen & Sebastian Koehne & Patrick Nüß & Jens Ruhose, 2024. "Socioeconomic Inequality in Life Expectancy: Perception and Policy Demand," CESifo Working Paper Series 10940, CESifo.
    11. Martin Brun & Xavier Ramos, 2025. "Attitudes to income inequality and redistribution," Working Papers 33, Finnish Centre of Excellence in Tax Systems Research.
    12. Bellani, Luna & Berriochoa, Kattalina & Kapteina, Mark & Schwerdt, Guido, 2024. "Information Provision and Support for Inheritance Taxation: Evidence from a Representative Survey Experiment in Germany," IZA Discussion Papers 17099, IZA Network @ LISER.
    13. Henkel, Aljosha & Fehr, Ernst & Senn, Julien & Epper, Thomas, 2025. "Beliefs about inequality and the nature of support for redistribution," Journal of Public Economics, Elsevier, vol. 246(C).
    14. Domènech-Arumí, Gerard, 2025. "Neighborhoods, perceived Inequality, and preferences for Redistribution: Evidence from Barcelona," Journal of Public Economics, Elsevier, vol. 242(C).
    15. Fehr, Dietmar & Müller, Daniel & Preuss, Marcel, 2024. "Social mobility perceptions and inequality acceptance," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 366-384.
    16. Lisa Simon, 2019. "Microeconometric Analyses on Determinants of Individual Labour Market Outcomes," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 83, April.
    17. Raymundo M. Campos-Vazquez & Samuel D. Restrepo-Oyola, 2025. "A randomized intervention to gauge preferred tax rates and progressivity," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 32(3), pages 782-804, June.
    18. Hoy, Christopher & Kim, Yeon Soo & Nguyen, Minh Cong & Sosa, Mariano & Tiwari, Sailesh, 2026. "Attitudes towards reducing fossil fuel subsidies: Evidence across 12 middle-income countries," Journal of Development Economics, Elsevier, vol. 178(C).
    19. Elisabeth Sattler-Bublitz & Hequn Wang & Julian Jäger & Henning Lohmann & Miriam Beblo, 2024. "Misperceptions, Income Positions, and Attitudes Toward EU Inequality: A Cross-Country Survey Experiment," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 171(1), pages 25-45, January.
    20. Knell, Markus & Stix, Helmut, 2020. "Perceptions of inequality," European Journal of Political Economy, Elsevier, vol. 65(C).
    21. McNamara, Trent & Mosquera, Roberto, 2024. "The political divide: The case of expectations and preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 110(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:fistud:v:46:y:2025:i:3:p:373-397. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1475-5890 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.