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Knowledge is Power: A Theory of Information, Income, and Welfare Spending

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  • Lind, Jo Thori

    () (Dept. of Economics, University of Oslo)

  • Rhoner, Dominic

    () (Department of Economics, University of Zurich)

Abstract

No voters cast their votes based on perfect information, but better educated and richer voters are on average better informed than others. We develop a model where the voting mistakes resulting from low political knowledge reduce the weight of poor voters, and cause parties to choose political platforms that are better aligned with the preferences of rich voters. In US election survey data, we nd that income is more important in a ecting voting behavior for more informed voters than for less informed voters, as predicted by the model. Further, in a panel of US states we nd that when there is a strong correlation between income and political information, Congress representatives vote more conservatively, which is also in line with our theory.

Suggested Citation

  • Lind, Jo Thori & Rhoner, Dominic, 2011. "Knowledge is Power: A Theory of Information, Income, and Welfare Spending," Memorandum 26/2011, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2011_026
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    More about this item

    Keywords

    Redistribution; Welfare Spending; Information; Income; Voting; Political Economics;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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