Knowledge is Power: A Theory of Information, Income, and Welfare Spending

University of Zurich Department of Economics Working Paper No. 36

31 Pages Posted: 9 Nov 2011

See all articles by Jo Thori Lind

Jo Thori Lind

University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Dominic Rohner

University of Zurich

Multiple version iconThere are 2 versions of this paper

Date Written: October 10, 2011

Abstract

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.

Keywords: Redistribution, Welfare Spending, Information, Income, Voting, Political Economics

JEL Classification: D31, D72, D82, H53

Suggested Citation

Lind, Jo Thori and Rohner, Dominic, Knowledge is Power: A Theory of Information, Income, and Welfare Spending (October 10, 2011). University of Zurich Department of Economics Working Paper No. 36, Available at SSRN: https://ssrn.com/abstract=1957154 or http://dx.doi.org/10.2139/ssrn.1957154

Jo Thori Lind (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Dominic Rohner

University of Zurich ( email )

Muehlebachstrasse 86
Zurich, 8008
Switzerland

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