Abstract: As economic inequality grows, more people stand to benefit from wealth redistribution. Yet in many countries, increasing inequality has not produced growing support for redistribution, and people often appear to vote against their economic interest. Here we suggest that two cognitive tendencies contribute to these paradoxical voting patterns. First, people gauge their income through social comparison, and those comparisons are usually made to similar others. Second, people are insensitive to large numbers, which leads them to underestimate the gap between themselves and the very wealthy. These two tendencies can help explain why subjective income is normally distributed (therefore most people think they are middle class) and partly explain why many people who would benefit from redistribution oppose it. We support our model’s assumptions using survey data, a controlled experiment, and agent-based modeling. Our model sheds light on the cognitive barriers to reducing inequality.
Keywords: behavioral economics, decision making, social comparison
Check also Women’s demand for redistribution is higher; the gender difference appears only when the source of inequality is based on relative abilities, but not when it is based on luck; men are more overconfident on their abilities:
Overconfidence and gender gaps in redistributive preferences: Cross-Country experimental evidence. Thomas Buser et al. Journal of Economic Behavior & Organization, Volume 178, October 2020, Pages 267-286. https://www.bipartisanalliance.com/2020/08/womens-demand-for-redistribution-is.html
And Due to patriotic indoctrination, the Chinese self-sacrifice for national interest and demand less redistribution:
Why is welfare provision unpopular in China? Alex C. H. Chang. Democratization, Jul 22 2020. https://www.bipartisanalliance.com/2020/08/why-is-welfare-provision-unpopular-in.html
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