Applied Economics Lunch Seminar

Du 21/06/2022 de 12:30 à 13:30

Salle R1.15 PSE

LOBECK Max ( University of Konstanz)

Inequality Externality Beliefs and Redistributive Preferences

This paper explores beliefs about how economic inequality changes society and establishes a causal link between such inequality externality beliefs and redistributive preferences. Using a representative survey of 4,371 U.S. citizens, we show that essentially every individual believes that inequality affects society in one way or another. Large and consistent majorities believe inequality leads to more negative societal outcomes through channels such as increased crime or worsening economic factors. These beliefs are widespread across incomes and party lines, contrasting to more narrowly held fairness concerns. We establish a causal link to individuals' redistributive preferences by using exogenously provided video information treatments, and estimate the importance of externality beliefs for redistributive preferences to be roughly two-thirds that of fairness views. Externality-based arguments induce less anger and are more broadly convincing across the income distribution than fairness-based arguments, indicating that focusing on inequality's societal effects is less polarizing than classic fairness discussions.