Aggregation Reversals and the Social Formation of Beliefs

38 Pages Posted: 14 Apr 2007 Last revised: 11 Aug 2010

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Bruce Sacerdote

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

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Date Written: April 2007

Abstract

In the past two elections, richer people were more likely to vote Republican while richer states were more likely to vote Democratic. This switch is an aggregation reversal, where an individual relationship, like income and Republicanism, is reversed at some level of aggregation. Aggregation reversals can occur when an independent variable impacts an outcome both directly and indirectly through a correlation with beliefs. For example, income increases the desire for low taxes but decreases belief in Republican social causes. If beliefs are learned socially, then aggregation can magnify the connection between the independent variable and beliefs, which can cause an aggregation reversal. We estimate the model's parameters for three examples of aggregation reversals, and show with these parameters that the model predicts the observed reversals.

Suggested Citation

Glaeser, Edward L. and Sacerdote, Bruce, Aggregation Reversals and the Social Formation of Beliefs (April 2007). NBER Working Paper No. w13031. Available at SSRN: https://ssrn.com/abstract=979936

Edward L. Glaeser (Contact Author)

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Bruce Sacerdote

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