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Information and Preferences for Public Spending: Evidence from Representative Survey Experiments

Author

Listed:
  • Philipp Lergetporer

    () (Ifo Institute, University of Munich, Germany; CESifo)

  • Guido Schwerdt

    () (Department of Economics, University of Konstanz, Germany; CESifo, IZA)

  • Katharina Werner

    () (Ifo Institute, University of Munich, Germany)

  • Ludger Woessmann

    () (Ifo Institute, University of Munich, Germany; CESifo, IZA, and CAGE)

Abstract

The electorates’ lack of information about the extent of public spending may cause misalignments between voters’ preferences and the size of government. We devise a series of representative survey experiments in Germany that randomly provide treatment groups with information on current spending levels. Results show that such information strongly reduces support for public spending in various domains from social security to defense. Data on prior information status on school spending and teacher salaries shows that treatment effects are strongest for those who initially underestimated spending levels, indicating genuine information effects rather than pure priming effects. Information on spending requirements also reduces support for specific education reforms. Preferences on spending across education levels are also malleable to information.

Suggested Citation

  • Philipp Lergetporer & Guido Schwerdt & Katharina Werner & Ludger Woessmann, 2016. "Information and Preferences for Public Spending: Evidence from Representative Survey Experiments," Working Paper Series of the Department of Economics, University of Konstanz 2016-07, Department of Economics, University of Konstanz.
  • Handle: RePEc:knz:dpteco:1607
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    References listed on IDEAS

    as
    1. Glomm, Gerhard & Ravikumar, B. & Schiopu, Ioana C., 2011. "The Political Economy of Education Funding," Handbook of the Economics of Education, Elsevier.
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    5. Dollery, Brian E & Worthington, Andrew C, 1996. " The Empirical Analysis of Fiscal Illusion," Journal of Economic Surveys, Wiley Blackwell, vol. 10(3), pages 261-297, September.
    6. David Romer, 2003. "Misconceptions and Political Outcomes," Economic Journal, Royal Economic Society, vol. 113(484), pages 1-20, January.
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    8. Joseph E. Stiglitz, 2000. "The Contributions of the Economics of Information to Twentieth Century Economics," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1441-1478.
    9. 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.
    10. R. M. Harstad & R. Selten., 2014. "Bounded-Rationality Models: Tasks to Become Intellectually Competitive," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
    11. James Ferris, 1983. "Demands for public spending: An attitudinal approach," Public Choice, Springer, vol. 40(2), pages 135-154, January.
    12. Stephen Coate, 2004. "Pareto-Improving Campaign Finance Policy," American Economic Review, American Economic Association, vol. 94(3), pages 628-655, June.
    13. Turnbull, Geoffrey K., 1998. "The Overspending and Flypaper Effects of Fiscal Illusion: Theory and Empirical Evidence," Journal of Urban Economics, Elsevier, vol. 44(1), pages 1-26, July.
    14. Alan Blinder & Alan Krueger, 2004. "What Does the Public Know about Economic Policy, and How Does It Know It?," Working Papers 875, Princeton University, Department of Economics, Industrial Relations Section..
    15. Julio J. Elias & Nicola Lacetera & Mario Macis, 2015. "Sacred Values? The Effect of Information on Attitudes toward Payments for Human Organs," American Economic Review, American Economic Association, vol. 105(5), pages 361-365, May.
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    Citations

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    Cited by:

    1. Martin R. West & Ludger Woessmann & Philipp Lergetporer & Katharina Werner, 2016. "How Information Affects Support for Education Spending: Evidence from Survey Experiments in Germany and the United States," NBER Working Papers 22808, National Bureau of Economic Research, Inc.
    2. Bublitz, Elisabeth, 2016. "Misperceptions of income distributions: Cross-country evidence from a randomized survey experiment," HWWI Research Papers 178, Hamburg Institute of International Economics (HWWI).
    3. Ludger Wößmann & Philipp Lergetporer & Franziska Kugler & Katharina Werner, 2016. "Denken Lehrkräfte anders über die Bildungspolitik als die Gesamtbevölkerung? - Ergebnisse des ifo Bildungsbarometers 2016," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 69(17), pages 19-34, September.
    4. Grigorieff, Alexis & Roth, Christopher & Ubfal, Diego, 2016. "Does Information Change Attitudes Towards Immigrants? Representative Evidence from Survey Experiments," IZA Discussion Papers 10419, Institute for the Study of Labor (IZA).
    5. Simon, Lisa & Piopiunik, Marc & Lergetporer, Philipp, 2017. "Information, perceived education level, and attitudes toward refugees: Evidence from a randomized survey experiment," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168280, Verein für Socialpolitik / German Economic Association.
    6. Philipp Lergetporer & Katharina Werner & Ludger Wößmann, 2017. "Public Opinion on Education Policy in Germany," CESifo Working Paper Series 6602, CESifo Group Munich.

    More about this item

    Keywords

    Public spending; Information; Preferences; Education spending; Survey experiment;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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