Egoistic and Sociotropic Policy Preferences

Abstract

Economic considerations help explain why individuals support some reforms, candidates, and parties while they oppose others. Previous work suggests that these preferences have both egoistic and sociotropic roots. We explore the relative importance of these factors and argue that sociotropic considerations reflect altruistic concerns for the poor. We design an experiment that details how a reform affects one's personal income, the average income in the country, and earnings of other individuals belonging to different income groups. This allows us to disentangle the egoistic and sociotropic origins of policy preferences. The results from a population-based sample of American citizens suggest that personal income changes are about twice as important as variation in average incomes. However, average income effects remain a significant driver of reform support irrespective of whether an individual personally gains or loses. This sensitivity seems to reflect pro-social concerns about the welfare of those that are worst off.

Keywords: Redistribution, Economic Policy, Individual Preferences, Self-Interest, Sociotropic Concerns, Altruism, Reforms, Survey Experiment, Conjoint Design

JEL Classification: D03, D6, C83, C90