How Markets Shape Values and Political Preferences: A Field Experiment

American Journal of Political Science

58 Pages Posted: 13 Nov 2018 Last revised: 12 May 2020

See all articles by Yotam Margalit

Yotam Margalit

Tel Aviv University

Moses Shayo

The Hebrew University of Jerusalem - Department of Economics

Date Written: September 4, 2019

Abstract

How does engagement with markets affect social-economic values and political preferences? A long line of thinkers has debated the nature and direction of such effects, but claims are difficult to assess empirically because market engagement is endogenous. We designed a large field experiment to evaluate the impact of financial markets, which have grown dramatically in recent decades. Participants from a national sample in England received substantial sums they could invest over a six-week period. We assigned them into several treatments designed to distinguish between different theoretical channels of influence. Results show that investment in stocks led to a more right-leaning outlook on issues such as merit and deservingness, personal responsibility and equality. Subjects also shifted to the right on policy questions. These results appear to be driven by growing familiarity with, and decreasing distrust of markets. The spread of financial markets thus has important and under-appreciated political ramifications.

Keywords: Financial Markets, Social Values, Political Preferences

Suggested Citation

Margalit, Yotam and Shayo, Moses, How Markets Shape Values and Political Preferences: A Field Experiment (September 4, 2019). American Journal of Political Science. Available at SSRN: https://ssrn.com/abstract=3283356 or http://dx.doi.org/10.2139/ssrn.3283356

Yotam Margalit

Tel Aviv University ( email )

Tel Aviv
Israel

HOME PAGE: http://www.ymargalit.net

Moses Shayo (Contact Author)

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

Mount Scopus
Jerusalem, IL Jerusalem 91905
Israel

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