ScottH. Irwin
Can information about inequality and social mobility change people’s support for redistribution?
Evidence from Randomized Control Trials in 12 countries
Can information change how people respond to inequality? 1
Christopher Hoy
Australian National University9 August 2018
Christopher Hoy
Scott H. Irwin
Should Gina have to pay taxes to fund welfare payments?
Introduction to Fake Beamer 2Can information change how people respond to inequality?Christopher Hoy Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?
Christopher Hoy
Scott H. Irwin
Another way of thinking about this…
Introduction to Fake Beamer 3Can information change how people respond to inequality?Christopher Hoy Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?
Christopher Hoy
Scott H. Irwin
Stylised facts about misperceptions of inequality and social mobilityEconomic theory behind why these misperceptions matterDesign of the randomised control trials I conductedResults and discussion
Outline
Introduction to Fake Beamer 4Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Stylised facts about misperceptions of inequality and social mobilityEconomic theory behind why these misperceptions matterDesign of the randomised control trials I conductedResults and discussion
Outline
Introduction to Fake Beamer 5Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Studies have shown (1) people tend to overestimate the degree of social mobility in their country
Introduction to Fake Beamer 6
Davidai et al, 2015
Who cares about inequality?Christopher Hoy and Franziska Mager Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Studies have shown (2) people tend to underestimate the level of inequality in their country
7Who Cares About Inequality?Christopher Hoy
Norton et al, 2014
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Who cares about inequality?Christopher Hoy and Franziska Mager Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Stylised facts about misperceptions of inequality and social mobilityEconomic theory behind why these misperceptions matterDesign of the randomised control trials I conductedResults and discussion
Outline
Introduction to Fake Beamer 8Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Utility for individual i, is as follows
Forms the basis of seminal theories in economics of preferences for redistribution
Meltzer Richard Hypothesis (1981)Prospect of Upward Mobility (Benabou and Ok, 2001)
Economic theory behind why these misperceptions matter
Introduction to Fake Beamer 9Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Alesina et al, 2011
Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Utility for individual i, is as follows
Forms the basis of seminal theories in economics of preferences for redistribution
Meltzer Richard Hypothesis (1981)Prospect of Upward Mobility (Benabou and Ok, 2001)
Economic theory behind why these misperceptions matter
Introduction to Fake Beamer 10Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Minimise
Can information change how people respond to inequality?Christopher Hoy
Alesina et al, 2011
Scott H. Irwin
Existing studies have not directly tested the hypothesis that information about inequality AND social mobility will increase support for redistribution
Introduction to Fake Beamer 11
Consistent(Kuziemko et al 2015,
Zilinsky 2014, Alesina et al 2018)
People like inequality(Alesina and
Angeletos, 2005)
Information can have a ‘Backfire’ effect
(Nyhan and Reifer, 2010)
Inconsistent
People overestimate inequality and
underestimate mobility(Niehues 2014)
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
The Myth of the American Dream
Introduction to Fake Beamer 12Can information change how people respond to inequality?Christopher Hoy Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Existing studies have not directly tested the hypothesis that information about inequality AND social mobility will increase support for redistribution
Introduction to Fake Beamer 13
Consistent(Kuziemko et al 2015,
Zilinsky 2014, Alesina et al 2018)
People like inequality(Alesina and
Angeletos, 2005)
Information can have a ‘Backfire’ effect
(Nyhan and Reifer, 2010)
Inconsistent
People overestimate inequality and
underestimate mobility(Niehues 2014)
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Stylised facts about misperceptions of inequality and social mobilityEconomic theory behind why these misperceptions matterDesign of the randomised control trials I conductedResults and discussion
Outline
Introduction to Fake Beamer 14Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
30,000 respondents in 12 countries that make up 1/3 of world’s population (Australia, Denmark, India, Indonesia, Mexico, Morocco, Netherlands, Nigeria, South Africa, Spain, the United Kingdom and the United States)
Experimental design to test effect of correcting misperceptions
15
Around 4500 respondentssplit randomly into 3
nationally representative groups in each country
Treatment Group:Overall level of inequality ANDDegree of social
mobility
Control group: No information
Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Example of what is provided to Treatment Group
16Who Cares About Inequality?Christopher Hoy
Alesina et al 2018, Kuziemko et al 2015
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Questions asked after the treatment
Introduction to Fake Beamer 17
ISSP 2009, Indrakesuma 2015
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Stylised facts about misperceptions of inequality and social mobilityEconomic theory behind why these misperceptions matterDesign of the randomised control trials I conductedResults and discussion
Outline
Introduction to Fake Beamer 18Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Effect of Treatment
19Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Effect of Treatment
20Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Christopher Hoy
6.2***
4.9**3.9*
-6.7***
-10
-50
5G
over
nmen
t res
pons
ible
for c
losi
ng g
ap (p
p di
ff T
vs C
)
UK AustraliaDenmark US
Scott H. Irwin
Existing studies have not directly tested the hypothesis that information about inequality AND social mobility will increase support for redistribution
Introduction to Fake Beamer 21
Consistent(Kuziemko et al 2015,
Zilinsky 2014, Alesina et al 2018)
People like inequality(Alesina and
Angeletos, 2005)
Information can have a ‘Backfire’ effect
(Nyhan and Reifer, 2010)
Inconsistent
People overestimate inequality and
underestimate mobility(Niehues 2014)
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
UK,Australia,Denmark
USA
Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Effect on policy priorities of Australians
22Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Christopher Hoy
.45
.5.5
5.6
Shar
e of
pop
ulat
ion
that
opp
ose
corp
orat
e ta
x cu
ts
TREATMENT GROUP CONTROL GROUP.1
6.1
8.2
.22
.24
.26
Shar
e of
pop
ulat
ion
prio
rtise
edu
catio
n an
d he
alth
TREATMENT GROUP CONTROL GROUP
Scott H. Irwin
Stylised facts about misperceptions of inequality and social mobilityEconomic theory behind why these misperceptions matterDesign of the randomised control trials I conductedResults and discussion
QUESTIONS
Introduction to Fake Beamer 23Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
EXTRA SLIDES
Introduction to Fake Beamer 24Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Questions asked after the treatment (2)
Introduction to Fake Beamer 25
Model and Related LiteratureMethodology
Indrakesuma 2015
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Information reduced support for social protection in India, Nigeria, South Africa, Morocco, Indonesia and the United States
Information had a limited effect on people’s preferences for what policies the national government should pursue
Introduction to Fake Beamer 26
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
SPAIN INDIA
MOROCCO NIGERIA
1. Telling People they are poorer than what they thought lowered their concern about inequality (1)
Introduction to Fake Beamer 27
.65
.7.7
5.8
Agre
eGap
TooL
arge
(N = 844) (N = 805) ***
Control TreatmentA
.78
.8.8
2.8
4.8
6Ag
reeG
apTo
oLar
ge
(N = 1067) (N = 934) ***
Control TreatmentA
.84
.86
.88
.9.9
2Ag
reeG
apTo
oLar
ge
(N = 1252) (N = 1193) ***
Control TreatmentA
Can information change how people respond to inequality?Christopher Hoy
.7.7
2.7
4.7
6.7
8Ag
reeG
apTo
oLar
ge
(N = 964) (N = 894) *
Control TreatmentA
Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
NETHERLANDS SOUTH AFRICA
MEXICO
1. Telling People they are poorer than what they thought lowered their concern about inequality (2)
Introduction to Fake Beamer 28
.58
.6.6
2.6
4.6
6.6
8Ag
reeG
apTo
oLar
ge
(N = 772) (N = 753) **
Control TreatmentA
.8.8
2.8
4.8
6.8
8Ag
reeG
apTo
oLar
ge
(N = 956) (N = 885) ***
Control TreatmentA
.78
.8.8
2.8
4.8
6Ag
reeG
apTo
oLar
ge
(N = 927) (N = 847) *
Control TreatmentA
Can information change how people respond to inequality?Christopher Hoy Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
Consistent(Cruces et al 2013,
Bublitz 2016, Karadja et al 2017)
Inconsistent
People use their living standard as a
benchmark for what is acceptable for others
(Nair 2016)
Poorer people are happy that there are
people who are poorer then them
(Kuziemko et al, 2014)
H1:Telling People they are Poorer then they thought will increase their concern about inequality and support for redistribution (vice a versa)
Introduction to Fake Beamer 29Christopher Hoy Can information shape preferences for redistribution?
Spain, India, Mexico, Nigeria
Netherlands,South Africa,
Morocco
Can information change how people respond to inequality?Christopher Hoy
Effect driven by people:1) In bottom 40% of
distribution2) Who prefer low
inequality3) Who would prefer
inequality to be lower than what they perceive it to be
Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
UNITED KINGDOM DENMARK
AUSTRALIA UNITED STATES
2. Telling People about inequality and mobility sometimes increased support for redistribution (except in the US)
Introduction to Fake Beamer 30
.5.5
2.5
4.5
6.5
8.6
Gov
Res
pons
ibilit
y
(N = 1078) (N = 870) ***
Control TreatmentB
.66
.68
.7.7
2.7
4.7
6G
ovR
espo
nsib
ility
(N = 971) (N = 960) ***
Control TreatmentB
.52
.54
.56
.58
.6.6
2G
ovR
espo
nsib
ility
(N = 974) (N = 974) *
Control TreatmentB
Can information change how people respond to inequality?Christopher Hoy
.6.6
2.6
4.6
6.6
8G
ovR
espo
nsib
ility
(N = 831) (N = 877) **
Control TreatmentB
Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
H2: Telling people about inequality and mobility in their country will increase their concern about inequality and support for redistribution
Introduction to Fake Beamer 31
Consistent(Kuziemko et al 2015,
Zilinsky 2014, Alesina et al 2018)
)
People like inequality
(Alesina and Angeletos, 2005)
Information can have a ‘Backfire’ effect
(Nyhan and Reifer, 2010)
Inconsistent
People overestimate inequality and
underestimate mobility(Niehues 2014)
Christopher Hoy Can information shape preferences for redistribution?
UK, Denmark,Australia
US
Can information change how people respond to inequality?
Other Countries the effect is driven by people:1) Prefer low
inequalityUS the effect is driven by people:1) Perceive there is
low inequality2) Prefer inequality
to be higher
Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
INDIA SOUTH AFRICA
NIGERIA INDONESIA
3. Information decreases support for social protection, rarely increases support taxes and sometimes reduces support for taxes (1)
Introduction to Fake Beamer 32
.04
.06
.08
.1.1
2.1
4So
cial
Prot
ectio
n
(N = 703) (N = 650) ***
Control TreatmentA
.03
.04
.05
.06
.07
.08
Soci
alPr
otec
tion
(N = 775) (N = 685) *
Control TreatmentA
.1.1
2.1
4.1
6.1
8So
cial
Prot
ectio
n
(N = 906) (N = 922) **
Control TreatmentB
Can information change how people respond to inequality?Christopher Hoy
-.05
0.0
5.1
Soci
alPr
otec
tion
(N = 152) (N = 163) **
Control TreatmentA
Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
SPAIN MEXICO
INDIA
3. Information decreases support for social protection, rarely increases support taxes and sometimes reduces support for taxes (2)
Introduction to Fake Beamer 33
.05
.1.1
5Ta
xonR
ich
(N = 194) (N = 207) **
Control TreatmentA
.04
.05
.06
.07
.08
.09
Taxo
nRic
h
(N = 652) (N = 631) **
Control TreatmentA
Can information change how people respond to inequality?Christopher Hoy
.05
.06
.07
.08
.09
.1Ta
xonR
ich
(N = 775) (N = 685) *
Control TreatmentA
Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
3. Information decreases support for social protection, rarely increases support taxes and sometimes reduces support for taxes (3)
Introduction to Fake Beamer 34
0.0
5.1
.15
Taxo
nRic
h
(N = 242) (N = 208) **
Control TreatmentB
.05
.1.1
5.2
Cut
Cor
pora
teTa
x
(N = 131) (N = 106) **
Control TreatmentA
Can information change how people respond to inequality?Christopher Hoy
How did Republican voters respond to information about inequality?More supportive of corporate tax cuts Less supportive of taxes on the rich
Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
1. People tend to underestimate extent of inequality 2. When presented with accurate information this does
not always change peoples views the way we would expect (eg. sometimes they become less concerned)
3. Example of the value in gathering people’s views and might be useful approach to use (eg online surveys)
4. Opportunity to explore projects where these misperceptions effect policies in developing countries (eg. self targeting of social protection programs)
Some reflections on what this might mean for ODI’s work
Introduction to Fake Beamer 35Can information change how people respond to inequality?Christopher Hoy Can information change how people respond to inequality?
Christopher Hoy and Franziska Mager
Scott H. Irwin
Overview of what I will cover today
Introduction to Fake Beamer 36
To answer ‘Can information change the way people respond to inequality?’ …
Variations of the following are areas for further research
1. Existing misperceptions of inequality
2. Basis to believe misperceptions matter
3. Misperceptions are correlated with outcome of interest
4. Causal design to test effect of correcting misperceptions
1. Presentation of information2. Type of inequality3. Outcomes4. Specificity of information5. Context6. Specific theory7. Specific policy
Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Four conditions to answer this question:1. Existing misperceptions of inequality 2. Basis to believe misperceptions matter3. Misperceptions are correlated with outcome
of interest4. Causal design to test effect of correcting
misperceptions
Can information change the way people respond to inequality?
Introduction to Fake Beamer 37Can information change how people respond to inequality?Christopher Hoy
Four conditions
Scott H. Irwin
1. Existing misperceptions of inequality (1)
38Who Cares About Inequality?Christopher Hoy
Norton et al 2014, Davidai et al 2015
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?
Four conditions
Scott H. Irwin
1. Existing misperceptions of inequality (2)
39
UK NIGERIA INDIA US
010
2030
4050
percent
1 2 3 4 5 020
4060
percent
1 2 3 4 5
020
4060
percent
1 2 3 4 5
010
2030
4050
percent
1 2 3 4 5
SPAIN SOUTH AFRICA MOROCCO NETHERLANDS
010
2030
4050
percent
1 2 3 4 5
020
4060
percent
1 2 3 4 5 010
2030
4050
percent
1 2 3 4 5
020
4060
percent
1 2 3 4 5
MEXICO DENMARK AUSTRALIA INDONESIA
Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?
020
4060
percent
1 2 3 4 5 020
4060
percent
1 2 3 4 5 Can information change how people respond to inequality?
010
2030
4050
percent
1 2 3 4 5
Four conditions
Scott H. Irwin
Individual’s utility is dependent on (Fehr and Schmidt 1999, Alesina et al 2011):
Their level of consumptionTheir level of consumption relative to othersThe level of inequality and mobility in society
Forms the basis of seminal economics theories of preferences for redistribution
Meltzer Richard Hypothesis (1981)Prospect of Upward Mobility (Benabou and Ok, 2001)Range of theories where your position in distribution matters (Black 1948, Romer 1975, Piketty 1995)
2. Basis to believe misperceptions matter
Introduction to Fake Beamer 40Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?
Four conditions
Scott H. Irwin
3. Misperceptions are correlated with outcome of interest
Introduction to Fake Beamer 41Christopher Hoy Can information shape preferences for redistribution?
0%
10%
20%
30%
40%
50%
60%
70%
80%TheGa
pbetweenRichandPooristooLarge
(Stro
nglyAgree)
Perceived tobeinthebottom40% Perceived tobeinthetop60%
Can information change how people respond to inequality?
Four conditions
Scott H. Irwin
3. Misperceptions are correlated with outcome of interest
Introduction to Fake Beamer 42
0%
10%
20%
30%
40%
50%
60%
70%
80%TheGa
pbetweenRichandPooristooLarge
(Stro
nglyAgree)
PerceiveHighInequality PerceiveModerate toLowInequality
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?
Four conditions
Scott H. Irwin
50,000 respondents in 12 countries that make up 1/3 of world’s population (Australia, Denmark, India, Indonesia, Mexico, Morocco, Netherlands, Nigeria, South Africa, Spain, the United Kingdom and the United States)
4. Causal design to test effect of correcting misperceptions
43
Around 4500 respondentssplit randomly into 3
nationally representative groups in each country
Treatment Group A: Place in distribution
Treatment Group B:Overall level of inequality ANDDegree of social
mobility
Control group: No information
Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?
Four conditionsOur study
Scott H. Irwin
Example of what is provided to Treatment Group A
44Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
Cruces et al 2013, Karadja et al 2017
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Example of what is provided to Treatment Group B
45Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
Alesina et al 2018, Kuziemko et al 2015
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Consistent(Cruces et al 2013,
Bublitz 2016, Karadja et al 2017)
Inconsistent
People use their living standard as a
benchmark for what is acceptable for others
(Nair 2016)
Poorer people are happy that there are
people who are poorer then them
(Kuziemko et al, 2014)
H1:Telling People they are Poorer then they thought will increase their concern about inequality and support for redistribution (vice a versa)
Introduction to Fake Beamer 46Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?
Four conditionsOur study
Scott H. Irwin
H2: Telling people about inequality and mobility in their country will increase their concern about inequality and support for redistribution
Introduction to Fake Beamer 47
Consistent(Kuziemko et al 2015,
Zilinsky 2014, Alesina et al 2018)
People like inequality(Alesina and
Angeletos, 2005)
Information can have a ‘Backfire’ effect
(Nyhan and Reifer, 2010)
Inconsistent
People overestimate inequality and
underestimate mobility(Niehues 2014)
Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?
Four conditionsOur study
Scott H. Irwin
1. Telling People they are poorer than what they thought often lowered their concern about inequality
2. Telling People about inequality and mobility sometimes increased support for redistribution (opposite effect in the US)
3. Information decreases support for social protection, rarely increases support for taxes and sometimes reduces support for taxes
Three key results that emerge from study
Introduction to Fake Beamer 48Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Scott H. Irwin
SPAIN INDIA
MOROCCO NIGERIA
1. Telling People they are poorer than what they thought lowered their concern about inequality (1)
Introduction to Fake Beamer 49
.65
.7.7
5.8
Agre
eGap
TooL
arge
(N = 844) (N = 805) ***
Control TreatmentA
.78
.8.8
2.8
4.8
6Ag
reeG
apTo
oLar
ge
(N = 1067) (N = 934) ***
Control TreatmentA
.84
.86
.88
.9.9
2Ag
reeG
apTo
oLar
ge
(N = 1252) (N = 1193) ***
Control TreatmentA
Can information change how people respond to inequality?Christopher Hoy
.7.7
2.7
4.7
6.7
8Ag
reeG
apTo
oLar
ge
(N = 964) (N = 894) *
Control TreatmentA
Four conditionsOur study
Scott H. Irwin
NETHERLANDS SOUTH AFRICA
MEXICO
1. Telling People they are poorer than what they thought lowered their concern about inequality (2)
Introduction to Fake Beamer 50
.58
.6.6
2.6
4.6
6.6
8Ag
reeG
apTo
oLar
ge
(N = 772) (N = 753) **
Control TreatmentA
.8.8
2.8
4.8
6.8
8Ag
reeG
apTo
oLar
ge
(N = 956) (N = 885) ***
Control TreatmentA
.78
.8.8
2.8
4.8
6Ag
reeG
apTo
oLar
ge
(N = 927) (N = 847) *
Control TreatmentA
Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Scott H. Irwin
Consistent(Cruces et al 2013,
Bublitz 2016, Karadja et al 2017)
Inconsistent
People use their living standard as a
benchmark for what is acceptable for others
(Nair 2016)
Poorer people are happy that there are
people who are poorer then them
(Kuziemko et al, 2014)
H1:Telling People they are Poorer then they thought will increase their concern about inequality and support for redistribution (vice a versa)
Introduction to Fake Beamer 51Christopher Hoy Can information shape preferences for redistribution?
Spain, India, Mexico, Nigeria
Netherlands,South Africa,
Morocco
Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Effect driven by people:1) In bottom 40% of
distribution2) Who prefer low
inequality3) Who would prefer
inequality to be lower than what they perceive it to be
Scott H. Irwin
UNITED KINGDOM DENMARK
AUSTRALIA UNITED STATES
2. Telling People about inequality and mobility sometimes increased support for redistribution (except in the US)
Introduction to Fake Beamer 52
.5.5
2.5
4.5
6.5
8.6
Gov
Res
pons
ibilit
y
(N = 1078) (N = 870) ***
Control TreatmentB
.66
.68
.7.7
2.7
4.7
6G
ovR
espo
nsib
ility
(N = 971) (N = 960) ***
Control TreatmentB
.52
.54
.56
.58
.6.6
2G
ovR
espo
nsib
ility
(N = 974) (N = 974) *
Control TreatmentB
Can information change how people respond to inequality?Christopher Hoy
.6.6
2.6
4.6
6.6
8G
ovR
espo
nsib
ility
(N = 831) (N = 877) **
Control TreatmentB
Four conditionsOur study
Scott H. Irwin
H2: Telling people about inequality and mobility in their country will increase their concern about inequality and support for redistribution
Introduction to Fake Beamer 53
Consistent(Kuziemko et al 2015,
Zilinsky 2014, Alesina et al 2018)
)
People like inequality
(Alesina and Angeletos, 2005)
Information can have a ‘Backfire’ effect
(Nyhan and Reifer, 2010)
Inconsistent
People overestimate inequality and
underestimate mobility(Niehues 2014)
Christopher Hoy Can information shape preferences for redistribution?
UK, Denmark,Australia
US
Can information change how people respond to inequality?
Four conditionsOur study
Other Countries the effect is driven by people:1) Prefer low
inequalityUS the effect is driven by people:1) Perceive there is
low inequality2) Prefer inequality
to be higher
Scott H. Irwin
INDIA SOUTH AFRICA
NIGERIA INDONESIA
3. Information decreases support for social protection, rarely increases support taxes and sometimes reduces support for taxes (1)
Introduction to Fake Beamer 54
.04
.06
.08
.1.1
2.1
4So
cial
Prot
ectio
n
(N = 703) (N = 650) ***
Control TreatmentA
.03
.04
.05
.06
.07
.08
Soci
alPr
otec
tion
(N = 775) (N = 685) *
Control TreatmentA
.1.1
2.1
4.1
6.1
8So
cial
Prot
ectio
n
(N = 906) (N = 922) **
Control TreatmentB
Can information change how people respond to inequality?Christopher Hoy
-.05
0.0
5.1
Soci
alPr
otec
tion
(N = 152) (N = 163) **
Control TreatmentA
Four conditionsOur study
Scott H. Irwin
SPAIN MEXICO
INDIA
3. Information decreases support for social protection, rarely increases support taxes and sometimes reduces support for taxes (2)
Introduction to Fake Beamer 55
.05
.1.1
5Ta
xonR
ich
(N = 194) (N = 207) **
Control TreatmentA
.04
.05
.06
.07
.08
.09
Taxo
nRic
h
(N = 652) (N = 631) **
Control TreatmentA
Can information change how people respond to inequality?Christopher Hoy
.05
.06
.07
.08
.09
.1Ta
xonR
ich
(N = 775) (N = 685) *
Control TreatmentA
Four conditionsOur study
Scott H. Irwin
3. Information decreases support for social protection, rarely increases support taxes and sometimes reduces support for taxes (3)
Introduction to Fake Beamer 56
0.0
5.1
.15
Taxo
nRic
h
(N = 242) (N = 208) **
Control TreatmentB
.05
.1.1
5.2
Cut
Cor
pora
teTa
x
(N = 131) (N = 106) **
Control TreatmentA
Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
How did Republican voters respond to information about inequality?More supportive of corporate tax cuts Less supportive of taxes on the rich
Scott H. Irwin
Where to from here?
Introduction to Fake Beamer 57
Four Conditions Variations of the following are areas for further research
1. Existing misperceptions of inequality
2. Basis to believe misperceptions matter
3. Misperceptions are correlated with outcome of interest
4. Causal design to test effect of correcting misperceptions
1. Presentation of information2. Type of inequality3. Outcomes4. Specificity of information5. Context6. Specific theory7. Specific policy
Four conditionsOur study
Where to from here
Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Presentation of information
Introduction to Fake Beamer 58Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Where to from here
Richest20%
Everyoneelse
Howwealthisdivided inAustralia
0 10 20 30 40 50 60 70
Richest20%
Poorest20%
Percent
Howwealthisdivided inAustralia
Scott H. Irwin
Type of inequality
Introduction to Fake Beamer 59Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Where to from here
1.5
22.
5La
bour
erPa
yRis
e
(N = 989) (N = 994) *
Control TreatmentB
Scott H. Irwin
Outcome of interest
Introduction to Fake Beamer 60Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Where to from here
.24
.26
.28
.3.3
2Vo
teAg
ains
tPre
side
nt
(N = 906) (N = 922) **
Control TreatmentB
Scott H. Irwin
Specificity of information
Introduction to Fake Beamer 61Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Where to from here
Kuziemko et al 2015, Engelhardt and Wagener 2016
Scott H. Irwin
Context
Introduction to Fake Beamer 62Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Where to from here
.5.5
2.5
4.5
6.5
8.6
Gov
Res
pons
ibilit
y(N = 1078) (N = 870) ***
Control TreatmentB
.66
.68
.7.7
2.7
4.7
6G
ovR
espo
nsib
ility
(N = 971) (N = 960) ***
Control TreatmentB
vs
United Kingdom United States
Scott H. Irwin
Piketty 1995 (Social Mobility and Redistributive Preferences)
Specific theory
Introduction to Fake Beamer 63Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Where to from here
Scott H. Irwin
Specific policy
Introduction to Fake Beamer 64
Four conditionsOur study
Where to from here
Can information change how people respond to inequality?Christopher Hoy
Alatas et al, 2016
Scott H. Irwin
Four Conditions Variations of the following are areas for further research
1. Existing misperceptions of inequality
2. Basis to believe misperceptions matter
3. Misperceptions are correlated with outcome of interest
4. Causal design to test effect of correcting misperceptions
1. Presentation of information2. Type of inequality3. Outcomes4. Specificity of information5. Context6. Specific theory7. Specific policy
A framework for further research in this area
Introduction to Fake Beamer 65Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Where to from here
Scott H. Irwin
US$20k – Replicate same experiment in ChinaUS$50k – Test 8 different types of ‘information interventions’ in UK or USUS$125k – Test Piketty’s 1995 Theory in IndonesiaUS$300k – Develop a research agenda with multiple trials in multiple countries
Response to Jonathan’s ‘wishlist’
Introduction to Fake Beamer 66Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
ADDITIONAL SLIDES
Introduction to Fake Beamer 67Can information change how people respond to inequality?Christopher Hoy
Scott H. Irwin
Vary:Type of information (eg. absolute vs relative inequality)Type of inequality (eg. wage, education, health)Outcomes (eg. voting, charitable giving)Specificity (eg. inheritance taxes)Context (eg. nationwide study in China, focus group of elites at Davos 2019)Theory being tested (eg. Piketty’s 1995 model)
Where to from here?
Introduction to Fake Beamer 68Can information change how people respond to inequality?Christopher Hoy
Four conditionsOur study
Where to from here
Scott H. Irwin Introduction to Fake Beamer 69
15.4%
54.7%
30.3%
0%
10%
20%
30%
40%
50%
60%
Actuallymovedup Staysame Actuallymoveddown
ShareofRespondents
ActualMobility
ActualMobility between2000and2007
34.9%
57.5%
7.6%
0%
20%
40%
60%
80%
Actuallymovedup Staysame ActuallymoveddownShareofRespondents
ActualMobility
Perceivedchangeamongthosethatactuallymoveddown
38.6%
54.6%
6.8%
0%10%20%30%40%50%60%
Actuallymovedup Staysame ActuallymoveddownShareofRespondents
ActualMobility
Perceivedchangeamongthosethatactuallymovedup
30.8%
62.6%
6.7%
0%
20%
40%
60%
80%
Actuallymovedup Staysame ActuallymoveddownShareofRespondents
ActualMobility
Perceivedchangeamongthosethatstayedinthesameplace
Scott H. Irwin
CONTEXT: Most of the world’s population live in countries where inequality has been rising for decades
Introduction to Fake Beamer 70Can information shape preferences for redistribution?Christopher Hoy
World Inequality Report, 2017
Scott H. Irwin
Model and Related LiteratureMethodologyDataResultsDiscussion
Outline
Introduction to Fake Beamer 71
Model and Related LiteratureMethodology
DataResults
Discussion
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
ca = consumption of person A, cp = consumption of person poorer than ca, cr = consumption of person richer than ca, Beta = weighting of cp relative to own consumptionGamma = weighting of cr relative to own consumption
Key predictions:People are adverse to inequalityThey care more about the consumption of those richer than them
A Theory of Fairness, Competition and Cooperation
Introduction to Fake Beamer 72
Fehr and Schmidt, 1999
Model and Related Literature
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
l denotes income differences due to luck, e denotes income differences due to effort
Captures seminal theories of preferences for redistributionMeltzer Richard Hypothesis (1981)Prospect of Upward Mobility hypothesis (Benabou and Ok, 2001)Range of theories where your position in distribution matters (Black 1948, Romer 1975, Piketty 1995)
Consumption differences overtime (ie. Social Mobility)
Introduction to Fake Beamer 73
Alesina et al, 2011
Model and Related Literature
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
cp(p) = perceived consumption of person poorer than ca cr(p) = perceived consumption of person richer than ca
Growing literature to show people tend to misperceiveThe level of inequality in their country (Norton et al 2011, Norton et al 2014, Indrakesuma 2015)The degree of mobility (Davidai et al 2015, Alesina et al 2018, Niehues2014)Their place in the distribution (Bublitz 2016, Hauser and Norton 2017)
The role of perceptions of others consumption
Introduction to Fake Beamer 74
Gimpelson and Treisman, 2017
Model and Related Literature
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought
H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility
Two predictions of this model that I test
Introduction to Fake Beamer 75
Model and Related Literature
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Consistent
Theory accurate(Cruces et al 2013,
Bublitz 2016, Karadjaet al 2017)
Placebo effect (Nair 2016)
Inconsistent
Poorer people are not averse to people being
poorer then them(Kuziemko et al, 2014)
People use their living standard as a
benchmark for what is acceptable for others
(Nair 2016)
H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought
Introduction to Fake Beamer 76
Model and Related Literature
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility
Introduction to Fake Beamer 77
Consistent
Theory accurate(Kuziemko et al 2015, Zilinsky 2014, Alesina
et al 2018)
Placebo effect(Nair 2016)
Inconsistent
Tolerant of inequality(Alesina and
Angeletos, 2005)
Backfire effect(Nyhan and Reifer,
2010)
Model and Related Literature
Overestimate inequality and
underestimate mobility(Niehues 2014)
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Design First study to include multiple treatment groupsCombine treatment on inequality and mobilitySolicit prior beliefs to enable exploring of channels
Scale 1/3 of world’s population, 10x more respondents in more countries than all other studies combinedFirst in multiple middle income countriesAdequate power to capture heterogeneous effects
How this study extends the literature
Introduction to Fake Beamer 78
Model and Related Literature
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Conduct Online Field Experiments in 12 countries with over 50,000 respondents
Introduction to Fake Beamer 79
Model and Related LiteratureMethodology
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Example of question asked prior to treatment
Introduction to Fake Beamer 80
Model and Related LiteratureMethodology
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Questions asked after the treatment (1)
Introduction to Fake Beamer 81
Model and Related LiteratureMethodology
ISSP 2009, Indrakesuma 2015
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Questions asked after the treatment (2)
Introduction to Fake Beamer 82
Model and Related LiteratureMethodology
Indrakesuma 2015
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Design of Randomized Control Trials
83
Around 4500 respondentssplit randomly into 3
nationally representative groups in each country
Treatment Group A: Place in distribution
Treatment Group B:Overall level of inequality ANDDegree of social
mobility
Control group: No information
Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Example of what is provided to Treatment Group A
84Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
Cruces et al 2013, Karadja et al 2017
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Example of what is provided to Treatment Group B
85Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
Alesina et al 2018, Kuziemko et al 2015
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
where Yi is an indicator variable that takes on the value one for answer i to each question and zero for all other answers. T1 is an indicator variable that compares Treatment group A to the control group, T2 is an indicator variable that compares Treatment group B to the control group ∈is the model error term. 𝛼$%captures the share of respondents in the control group that selected answer i to each question. 𝛼&% captures the average difference between respondents in treatment group A and respondents in the control group that selected response i to the question𝛼'% captures the average difference between respondents in treatment group B and respondents in the control group that selected response i to the question.
Econometric Analysis
Introduction to Fake Beamer 86
Model and Related LiteratureMethodology
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Misperceptions related to a respondent’s position in the national distribution (H1)
87
UK NIGERIA INDIA US
010
2030
4050
percent
1 2 3 4 5 020
4060
percent
1 2 3 4 5
020
4060
percent
1 2 3 4 5
010
2030
4050
percent
1 2 3 4 5
SPAIN SOUTH AFRICA MOROCCO NETHERLANDS
010
2030
4050
percent
1 2 3 4 5
020
4060
percent
1 2 3 4 5 010
2030
4050
percent
1 2 3 4 5
020
4060
percent
1 2 3 4 5
MEXICO DENMARK AUSTRALIA INDONESIA
Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?
020
4060
percent
1 2 3 4 5 020
4060
percent
1 2 3 4 5
010
2030
4050
percent
1 2 3 4 5
Model and Related LiteratureMethodology
Data
Scott H. Irwin
Relationship between perceived position in distribution and agreeing the gap between rich and poor is too large
Introduction to Fake Beamer 88
Model and Related LiteratureMethodology
Data
Christopher Hoy Can information shape preferences for redistribution?
0%
10%
20%
30%
40%
50%
60%
70%
80%TheGa
pbetweenRichandPooristooLarge
(Stro
nglyAgree)
Perceived tobeinthebottom40% Perceived tobeinthetop60%
Scott H. Irwin
Relationship between actual position in distribution and agreeing the gap between rich and poor is too large
Introduction to Fake Beamer 89
Model and Related LiteratureMethodology
Data
Christopher Hoy Can information shape preferences for redistribution?
0%
10%
20%
30%
40%
50%
60%
70%
80%TheGa
pbetweenRichandPooristooLarge
(Stro
nglyAgree)
Actuallyinthebottom40% Actuallyinthetop60%
Scott H. Irwin
Misperceptions related to the level of the inequality in their country (H2)
Introduction to Fake Beamer 90
0%
20%
40%
60%
80%
100%ShareofRespondents
Highinequality Moderate inequality Lowinequality
Model and Related LiteratureMethodology
Data
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Relationship between perception of the overall level of inequality and concern about inequality
Introduction to Fake Beamer 91
0%
10%
20%
30%
40%
50%
60%
70%
80%TheGa
pbetweenRichandPooristooLarge
(Stro
nglyAgree)
PerceiveHighInequality PerceiveModerate toLowInequality
Model and Related LiteratureMethodology
Data
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought
Overestimated PlaceUnderestimate Place
H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility
Results
Introduction to Fake Beamer 92
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Effect of Treatment A on people who were poorer than they thought
93Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Effect of Treatment A on people who were poorer than they thought
94Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Effect of Treatment A on people who were richer than they thought
95Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Effect of Treatment A on people who were richer than they thought
96Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Effect of Treatment B
97Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Effect of Treatment B
98Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Information reduced support for social protection in India, Nigeria, South Africa, Morocco, Indonesia and the United States Information increased support for taxes on the rich in Spain, Mexico and IndiaInformation increased support for corporate tax cuts in the United States among those people who overestimated their position
Information had a limited effect on people’s preferences for what policies the national government should pursue
Introduction to Fake Beamer 99
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
People overestimating their place in the distribution has lead to greater concern about inequality in many countriesMisperceptions of the overall level of inequality and mobility have sometimes reduced concern about inequality and support for redistributionThe opposite effects tend to be the case in the United States
Summary of key findings
100Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Misperceptions effect Voting behaviour in IndonesiaSupport for NGOs in MexicoBeliefs about why people are rich and poor in Australia, Indonesia and Mexico
Information about the overall level of inequality can moderate the effect of information about position in AustraliaInformation about just overall level of inequality (excluding mobility) has differing effects in Indonesia
Additional findings
101Who Cares About Inequality?Christopher Hoy
Model and Related LiteratureMethodology
DataResults
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thoughtH2: Information about the level of overall inequality and social mobility in their country will lower people‘s utilityI discuss the results for the United States separately as they are very distinct
Discussion/Channels
Introduction to Fake Beamer 102
Model and Related LiteratureMethodology
DataResults
Discussion
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Consistent
Theory accurate(Cruces et al 2013,
Bublitz 2016, Karadjaet al 2017)
Placebo effect (Nair 2016)
Inconsistent
Poor people are not averse to people being
poorer then them(Kuziemko et al, 2014)
People use their living standard as a
benchmark for what is acceptable for others
(Nair 2016)
H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought
Introduction to Fake Beamer 103Christopher Hoy Can information shape preferences for redistribution?
Model and Related LiteratureMethodology
DataResults
Discussion
Scott H. Irwin
Consistent
Theory accurate(Cruces et al 2013,
Bublitz 2016, Karadjaet al 2017)
Placebo effect (Nair 2016)
Inconsistent
Poor people are not averse to people being
poorer then them(Kuziemko et al, 2014)
People use their living standard as a
benchmark for what is acceptable for others
(Nair 2016)
H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought
Introduction to Fake Beamer 104Christopher Hoy Can information shape preferences for redistribution?
Effect driven by people:1) In bottom 40% of
distribution2) Perceive there is
moderate to low inequality
3) Prefer low inequality
4) Would prefer inequality to be lower
Model and Related LiteratureMethodology
DataResults
Discussion
Scott H. Irwin
H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility
Introduction to Fake Beamer 105
Consistent
Theory accurate(Kuziemko et al 2015, Zilinsky 2014, Alesina
et al 2018)
Placebo effect(Nair 2016)
Tolerant of inequality(Alesina and
Angeletos, 2005)
Backfire effect(Nyhan and Reifer,
2010)
Inconsistent
Overestimate inequality and
underestimate mobility(Niehues 2014)
Model and Related LiteratureMethodology
DataResults
Discussion
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility
Introduction to Fake Beamer 106
Consistent
Theory accurate(Kuziemko et al 2015, Zilinsky 2014, Alesina
et al 2018)
Placebo effect(Nair 2016)
Tolerant of inequality(Alesina and
Angeletos, 2005)
Backfire effect(Nyhan and Reifer,
2010)
Inconsistent
Overestimate inequality and
underestimate mobility(Niehues 2014)
Model and Related LiteratureMethodology
DataResults
Discussion
Christopher Hoy Can information shape preferences for redistribution?
Effect driven by people (varied by country):1) Perceive there to
be high inequality2) Prefer low
inequality3) Prefer if
inequality would be lower
No heterogeneous effects when people received information about their position
Scott H. Irwin
Consistent
Theory accurate(Cruces et al 2013,
Bublitz 2016, Karadjaet al 2017)
Placebo effect (Nair 2016)
Inconsistent
Poor people are not averse to people being
poorer then them(Kuziemko et al, 2014)
People use their living standard as a
benchmark for what is acceptable for others
(Nair 2016)
USA H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought
Introduction to Fake Beamer 107Christopher Hoy Can information shape preferences for redistribution?
Model and Related LiteratureMethodology
DataResults
Discussion
Scott H. Irwin
Consistent
Theory accurate(Cruces et al 2013,
Bublitz 2016, Karadjaet al 2017)
Placebo effect (Nair 2016)
Inconsistent
Poor people are not averse to people being
poorer then them(Kuziemko et al, 2014)
People use their living standard as a
benchmark for what is acceptable for others
(Nair 2016)
USA H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought
Introduction to Fake Beamer 108Christopher Hoy Can information shape preferences for redistribution?
Effect driven by people:1) In top 40% of
distribution 2) Who would prefer
inequality to be lower
Model and Related LiteratureMethodology
DataResults
Discussion
Scott H. Irwin
USA - H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility
Introduction to Fake Beamer 109
Consistent
Theory accurate(Kuziemko et al 2015, Zilinsky 2014, Alesina
et al 2018)
Placebo effect(Nair 2016)
Inconsistent
Tolerant of inequality(Alesina and
Angeletos, 2005)
Backfire effect(Nyhan and Reifer,
2010)
Overestimate inequality and
underestimate mobility(Niehues 2014)
Model and Related LiteratureMethodology
DataResults
Discussion
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
USA - H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility
Introduction to Fake Beamer 110
Consistent
Theory accurate(Kuziemko et al 2015, Zilinsky 2014, Alesina
et al 2018)
Placebo effect(Nair 2016)
Inconsistent
Tolerant of inequality(Alesina and
Angeletos, 2005)
Backfire effect(Nyhan and Reifer,
2010)
Overestimate inequality and
underestimate mobility(Niehues 2014)
Model and Related LiteratureMethodology
DataResults
Discussion
Christopher Hoy Can information shape preferences for redistribution?
Effect driven by people:1) Perceive there is
low inequality2) Prefer inequality
to be higher
Scott H. Irwin
Need to re-examine existing economic theoriesMisperceptions of inequality distort people’s preferences for redistributionCorrecting these misperceptions will not necessary increase support for redistribution and can even reduce itEffect of information in the United States is substantially different to rest of world
Concluding Remarks
Introduction to Fake Beamer 111
Model and Related LiteratureMethodology
DataResults
Discussion
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Another field experiment (in Australia) to conduct robust checks for these studiesConduct aggregate analysis (Bayesian Hieratical Modelling) to estimate common effectPackage results of this study into papers (egseparate paper of differences by political parties)
Next Steps
Introduction to Fake Beamer 112
Model and Related LiteratureMethodology
DataResults
Discussion
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin Introduction to Fake Beamer 113Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
ADDITIONAL SLIDES
Introduction to Fake Beamer 114Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
‘I believe this is the defining challenge of our time’Barrack Obama, Former US President
‘Excessive inequality is not good for sustainable growth’Christine Lagarde, Managing Director of IMF
‘Inequality is the root of social evil’ Pope Francis
Motivation
115Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
‘If poor people knew how rich, rich people are there would be riots on the streets’Chris Rock, American Comedian
Effect of Information (1)
116
Existing MisperceptionsEffect of information
Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Misperceptions related to a respondent’s position in the national distribution (H1) ADDITIONAL SLIDES
Introduction to Fake Beamer 117Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin Introduction to Fake Beamer 118Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Existing Misperceptions (1)
119
Existing Misperceptions
Who Cares About Inequality?Christopher Hoy
Norton et al, 2014
Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin Introduction to Fake Beamer 120Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin Introduction to Fake Beamer 121Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Effect of Treatment B on people who thought there was high inequality
Introduction to Fake Beamer 122Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Effect of Treatment B on people who thought there was low inequality
Introduction to Fake Beamer 123Christopher Hoy Can information shape preferences for redistribution?
Scott H. Irwin
Fundamentally, this is about the extent that people care about others wellbeing and are open to information changing their mindsThis effects a range of interactions in life like how people vote, their charitable giving and the way they view othersDisconnect between concern about inequality and support for redistribution
So what?
124
Existing MisperceptionsEffect of information
ResultsSo what?
Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?