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Redistribution and beliefs about the source of income inequality

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posted on 20.09.2021, 10:02 by Vanessa ValeroVanessa Valero
Previous literature demonstrates that beliefs about the determinants of income inequality play a major role in individual support for income redistribution. This study investigates how people form beliefs regarding the extent to which work versus luck determines income inequality. Specifically, I examine whether people form self-serving beliefs to justify supporting personally advantageous redistributive policies. I use a laboratory experiment where I directly measure beliefs and manipulate the incentives to engage in self-deception. I first replicate earlier results demonstrating that (1) people attribute income inequality to work when they receive a high income and to luck when they receive a low income and (2) their beliefs about the source of income inequality influence their preferences over redistributive policies. However, I do not find that people’s beliefs about the causes of income inequality are further influenced by self-serving motivations based on a desire to justify favorable redistributive policies. I conclude that, in my experiment, self-serving beliefs about the causes of income inequality are driven primarily by overconfidence and self-image concerns and not to justify favorable redistributive policies.

Funding

Swiss National Science Foundation for support (grant number 100018_185176)

History

School

  • Business and Economics

Department

  • Economics

Published in

SSRN

Citation

Valero, Vanessa, Redistribution and Beliefs about the Source of Income Inequality (May 13, 2020). Available at SSRN: https://ssrn.com/abstract=3599835 or http://dx.doi.org/10.2139/ssrn.3599835

Publisher

Elsevier BV

Version

NA (Not Applicable or Unknown)

Rights holder

© The Author

Publisher statement

Available at SSRN: https://ssrn.com/abstract=3599835 or http://dx.doi.org/10.2139/ssrn.3599835

eISSN

1556-5068

Language

en

Depositor

Dr Vanessa Valero. Deposit date: 17 September 2021

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