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Beliefs about Inequality and the Nature of Support for Redistribution

Author

Listed:
  • Aljosha Henkel

    (KOF Swiss Economic Institute, ETH Zurich, Leonhardstrasse 21, 8092 Zurich, Switzerland)

  • Ernst Fehr

    (Department of Economics, University of Zurich, Blümlisalpstrasse 10, 8006 Zurich, Switzerland)

  • Julien Senn

    (Department of Economics, University of Zurich, Blümlisalpstrasse 10, 8006 Zurich, Switzerland)

  • Thomas Epper

    (IESEG School of Management, University of Lille, CNRS, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France)

Abstract

Do beliefs about inequality depend on distributive preferences? What is the joint role of preferences and beliefs about inequality for support for redistribution? We study these questions in a staggered experiment with a representative sample of the Swiss population conducted in the context of a vote on a highly redistributive policy proposal. Our sample comprises a majority of inequality averse subjects, a sizeable group of altruistic subjects, and a minority of predominantly selfish subjects. Irrespective of preference types, individuals vastly overestimate the extent of income inequality. An information intervention successfully corrects these large misperceptions for all types, but essentially does not affect aggregate support for redistribution. These results hide, however, important heterogeneity because the effects of beliefs about inequality for demand for redistribution are preference-dependent: only affluent inequality averse individuals, but not the selfish and altruistic ones, significantly reduce their support for redistribution. These findings cast a new light on the seemingly puzzling result that, in the aggregate, large changes in beliefs about inequality often do not translate into changes in demand for redistribution.

Suggested Citation

  • Aljosha Henkel & Ernst Fehr & Julien Senn & Thomas Epper, 2024. "Beliefs about Inequality and the Nature of Support for Redistribution," Working Papers 2024-iRisk-02, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:e202402
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Social Preferences; Beliefs about Inequality; Preferences for Redistribution; Information; Inequality Aversion;
    All these keywords.

    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
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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