Knowledge is Power - A Theory of Information, Income, and Welfare Spending
University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
University of Zurich
October 20, 2011
CESifo Working Paper Series No. 3613
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 find that income is more important in affecting voting behavior for more informed voters than for less informed voters, as predicted by the model. Further, in a panel of US states we find 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.
Number of Pages in PDF File: 31
Keywords: redistribution, welfare spending, information, income, voting, political economics
JEL Classification: D310, D720, D820, H530working papers series
Date posted: October 20, 2011
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