Beliefs About Inequality and the Nature of Support for Redistribution

55 Pages Posted: 9 Apr 2024

See all articles by Ernst Fehr

Ernst Fehr

University of Zurich - Department of Economics

Aljosha Henkel

affiliation not provided to SSRN

Julien Senn

University of Zurich - Department of Economics

Thomas Epper

Catholic University of Lille - IESEG School of Management

Abstract

Do beliefs about inequality depend on distributive preferences? What is the joint role of preferences and beliefs about inequality for support for redistribution? We study these questions in a staggered experiment with a broadly representative sample of the Swiss population conducted in the context of a vote on a highly redistributive policy proposal. Our sample comprises a majority of inequality averse subjects, a sizeable group of altruistic subjects, and a minority of predominantly selfish subjects. Irrespective of preference types, individuals vastly overestimate the extent of income inequality. An information interventionsuccessfully corrects these large misperceptions for all types, but essentially does not affect aggregate support for redistribution. These results hide, however, important heterogeneity because the effects of beliefs about inequality for demand for redistribution are preference-dependent: only affluent inequality averse individuals, but not the selfish and altruistic ones, significantly reduce their support for redistribution. These findings cast a new light on the seemingly puzzling result that, in the aggregate, large changes in beliefs about inequality often do not translate into changes in demand for redistribution.

Keywords: Social Preferences, Beliefs about Inequality, Preferences for Redistribution, Information, Inequality Aversion

Suggested Citation

Fehr, Ernst and Henkel, Aljosha and Senn, Julien and Epper, Thomas, Beliefs About Inequality and the Nature of Support for Redistribution. Available at SSRN: https://ssrn.com/abstract=4788696 or http://dx.doi.org/10.2139/ssrn.4788696

Ernst Fehr (Contact Author)

University of Zurich - Department of Economics ( email )

Blümlisalpstrasse 10
Zuerich, 8006
Switzerland
+41 1 634 3709 (Phone)
+41 1 634 4907 (Fax)

Aljosha Henkel

affiliation not provided to SSRN ( email )

No Address Available

Julien Senn

University of Zurich - Department of Economics ( email )

Zürich
Switzerland

Thomas Epper

Catholic University of Lille - IESEG School of Management ( email )

Socle de la Grande Arche
1 Parvis de la Defense
Puteaux, 92800
France

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