2017

Richer (and Holier) Than Thou? The Effect of Relative Income Improvements on Demand for Redistribution

Reprint No. 2017:20

Author(s): Mounir Karadja, Johanna Möllerström and David SeimYear: 2017 Title: Review of Economics and Statistics Volume (No.): 99 (2) Pages: 201–212
Online article (restrictions may apply)
Preliminary version


We use a tailor-made survey on a Swedish sample to investigate how individuals' relative income affects their demand for redistribution. We first document that a majority misperceive their position in the income distribution and believe that they are poorer, relative to others, than they actually are. We then inform a subsample about their true relative income and find that individuals who are richer than they initially thought demand less redistribution. This result is driven by individuals with prior right-of-center political preferences who view taxes as distortive and believe that effort, rather than luck, drives individual economic success.


Reference:
Karadja, Mounir, Johanna Möllerström and David Seim (2017), "Richer (and Holier) Than Thou? The Effect of Relative Income Improvements on Demand for Redistribution". Review of Economics and Statistics 99(2), 201–212.

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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