Ego- vs. Sociotropic: Using Survey Experiments to Understand Individuals’ Trade Preferences
37 Pages Posted: 21 Aug 2014
Date Written: 2014
Economic self-interest has been central to explaining individual trade preferences. Depending on the theoretical trade model different variables should influence individuals’ attitude towards globalization. Existing research has come to different conclusions as to whether individuals’ preferences are dependent on their skills (i.e. their level of education), their income or the sector in which they are employed. Other studies depart from economic self-interest by arguing that it is not economic self-interest that motivates individuals to form their preference, but country-level economic factors (sociotropic considerations) instead (Fordham 2008, Mansfield and Mutz 2009). We argue that one needs to approach this empirical incoherence from an information-based perspective and question whether people know that they belong to the category of winners and losers and we test experimentally how people react if they are aware that they personally or nationally will gain or lose from trade and which of the two aspects (personal vs. national gains or losses) are more important. By using survey experiments we are able to differentiate whether a person was triggered by ego- or socio-tropic benefits/costs of free trade. To test our claims we accordingly conducted a representative national survey in the U.S., in which we rely on informational treatments. Overall, we do not find much evidence for a sociotropic view of trade openness. We find that individuals rather act upon their self-interest and exhibit loss aversion.
Keywords: individual trade preferences, survey experiment
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