Aspirations of the Middle Class: Voting on Redistribution and Status Concerns

Working Paper of the Max Planck Institute for Tax Law and Public Finance 2011-06

36 Pages Posted: 5 Jul 2011 Last revised: 31 Oct 2011

See all articles by Kai A. Konrad

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Florian Morath

Department of Public Finance, University of Innsbruck; Max Planck Institute for Tax Law and Public Finance

Date Written: July 2011

Abstract

This paper analyzes the role of narrowly selfish and other-regarding preferences for the median voter in a Meltzer-Richard (1981) framework. We use computerized and real human co-players to distinguish between these sets of motivations. Redistribution to real co-players has a negative effect on the median voter's tax rate choice. Further, perceived income mobility decreases the desired amount of redistribution. Our results suggest the importance of concerns about own mobility as well as status concerns of the median voter who tends to keep distance to the low-income group, whereas inequity aversion does not play a role in the political economy context.

Keywords: redistribution, other-regarding preferences, median voter, experiments

JEL Classification: C91, D03, D72, D78, H20

Suggested Citation

Konrad, Kai A. and Morath, Florian, Aspirations of the Middle Class: Voting on Redistribution and Status Concerns (July 2011). Working Paper of the Max Planck Institute for Tax Law and Public Finance 2011-06, Available at SSRN: https://ssrn.com/abstract=1879165 or http://dx.doi.org/10.2139/ssrn.1879165

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Centre for Economic Policy Research (CEPR)

90-98 Goswell Road
London, EC1V 7RR
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, 53072
Germany

Florian Morath

Department of Public Finance, University of Innsbruck ( email )

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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