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

Mounir Karadja; Johanna Mollerstrom; David Seim

doi:10.1162/rest_a_00623

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

Mounir Karadja¹; Johanna Mollerstrom; David Seim²

¹ Uppsala University · ² Research Institute of Industrial Economics

The Review of Economics and Statistics 2017 open access

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.

DOI: 10.1162/rest_a_00623
Volume: 99 (2)
Pages: 201-212
Language: en
Export: BibTeX
Sources: openalex crossref