Social Identity and Preferences Over Redistribution

45 Pages Posted: 20 Jul 2007 Last revised: 9 May 2011

See all articles by Esteban F. Klor

Esteban F. Klor

Hebrew University of Jerusalem - Department of Economics; Centre for Economic Policy Research (CEPR)

Moses Shayo

The Hebrew University of Jerusalem - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2009

Abstract

We design an experiment to study the effects of social identity on preferences over redistribution. The experiment highlights the trade-off between social identity concerns and maximization of monetary payoffs. Subjects belonging to two distinct natural groups are randomly assigned gross incomes and vote over alternative redistributive tax regimes, where the regime is chosen by majority rule. We find that a significant subset of the subjects systematically deviate from monetary payoff maximization towards the tax rate that benefits their group when the monetary cost of doing so is not too high. These deviations cannot be explained by efficiency concerns, inequality aversion, reciprocity, social learning or conformity. Finally, we show that behavior in the lab helps explain the relationship between reported income and stated preferences over redistribution observed in survey data.

Keywords: Social Identity, Social Preferences, Income Redistribution, Experimental Economics

JEL Classification: C92, D63, D72

Suggested Citation

Klor, Esteban F. and Shayo, Moses, Social Identity and Preferences Over Redistribution (July 1, 2009). Journal of Public Economics, Vol. 94, No. 3-4, 2010, Available at SSRN: https://ssrn.com/abstract=1000890

Esteban F. Klor (Contact Author)

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 588 3143 (Phone)
+972 2 581 6071 (Fax)

HOME PAGE: http://economics.huji.ac.il/facultye/klor/klor.htm

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Moses Shayo

The Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, Jerusalem 91905
Israel

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
424
Abstract Views
2,505
rank
76,312
PlumX Metrics