The importance of the 'ethical voter': An estimate of 'altruism'
John Hudson *, Philip R. Jones School of Social Sciences, University of Bath, Bath, BA2 7AY, United Kingdom
Accepted for publication December 1993
Abstract
This paper expands upon the concept of the 'ethical voter' put forward by Mueller (1987). A scalar measurement of altruism is presented, as well as a means of determining the factors which affect an individual's position on this scale. Two small pilot studies illustrate these concepts, it is found that altruism increases with the level of education and income. There is evidence that other socio-economic variables such as age and gender may have a differential impact over the election cycle.
Keywords: Altruism; Voting; Taxation; Public expenditure
JEL classification: D72
1. Introduction
There is a considerable volume of empirical work dealing with the question of whether or not individuals are motivated by pure self-interest when they vote (see Lewis (1982), Fisher (1985) and Mueller (1987)). In this literature a major stumbling block is the problem of distinguishing between pure self-interest and altruism. The usual approach is that the researcher imputes the motive that lies
* Corresponding author. The authors would like to acknowledge the helpful comments of Arthur Sehram, the former Editor, Manfred Holier, as well as comments from anonymous referees. The usual disclaimer applies.
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behind the voter 's choice. For example, if an individual decides to vote for additional taxation (net of any receipts that he might expect from government expenditure) he is deemed to have acted in the interests of the rest of the community and therefore to have behaved altruistically. By contrast if the voter is a net taxpayer and votes to reduce his tax bill, it is argued that he was motivated by self-interest.
Not surprisingly, the approach is open to question. For example, it assumes that the individual has an understanding of the public finances that is the same as that of the researcher. The final incidence and the ultimate burden of taxation is difficult to discern, even with the aid of a general equilibrium model, and there is no guarantee that the voter has perceived the impact of taxation and public expenditure in the same way as the researcher (Fisher (1985)). Indeed, given the costs of voting, it is possible that voters are 'rationally ignorant' when deciding which policy to support (Downs, 1957). In this case what can easily pass for altruism may he better explained by confusion. 1 Even if voters are well informed it is impossible to discount the possibility that, when a voter chooses to support a policy in his self-interest such support is also motivated by his perception that the policy is in the community's best interests. For example, if an individual believes in the merits of the market and votes to reduce tax, is this an expression of self-interest or a reflection of action to support what the individual considers best for the community? 2
In this paper we present an alternative test of the relative importance of self-interest and of broader societal concern. In the first section we apply the analysis of Mueller (1987) to describe an 'ethical voter' and devise a test for the importance of altruism. Later we report the results of a preliminary application of our test and discuss the advantages and disadvantages of our approach.
1 That individuals may support policies deemed to be broadly in their interest is suggested by studies such as Le Grand (1982). For example, middle-class voters may support the provision of welfare services from which they benefit. But this does not reveal why they offered support, i.e. whether they were motivated more by self-interest than by altruism. While it is acknowledged that for some expenditure programmes linkages can be made, voters often appear confused about the impact of taxes. In a study of American voters, Fisher (1985) is not able to reject the possibility t h a t " . . , individuals are confused about government finance and unable to make careful and consistent judgements about incidence" (p. 525) and Lewis (1982) surveys literature which indicates the limitations of individuals' fiscal awareness.
2As another example, Sears et al. (1980) contrast self-interest and symbolic attitudes (liberal or conservative ideology, party identification and racial prejudice) as determinants of voters' attitudes towards issues such as unemployment, health insurance, busing and law and order. The question they pose is: "Do people support those policies that further their private gains or do policy preferences originate instead in political predispositions which are largely the residue of an earlier political socialization that was ignorant of self interest?" (p. 671). One of the problems that they identify " . . . . is that symbolic attitudes themselves reflect self interest".
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2. Altruism as an externality
Altruism has been modelled as an externality (e.g. see Becker (1974)). The altruist might be assumed to derive utility, not only from h is /her personal consumption of goods and services, but also from the welfare of another individ- ual. Mueller (1987) describes this relationship in his definition of the ethical-voter hypothesis. He presents the view that each individual, i, maximises an objective function of the following form:
o, = v, + o E v j (1)
where O i = the objective; U~ = utility from consumption of goods and services; EUj = the sum of utility experienced by individuals other than individual i; 0 = a parameter.
If 0 were equal to zero the individual would be regarded as purely selfish and if 0 were equal to one he would be a complete altruist. Thus an altruist is defined as an individual who may maximise his objective function by foregoing personal utility in favour of increasing the utility of others. He might, for example, transfer personal consumption of goods and services (i.e. foregoing some U/) in order to assist others. In this way he would internalise the externality by transferring consumption to other individuals such as j. If, however, 0 were zero we would never expect an individual to forego personal consumption for others.
The key element in the definition of self-interest and of altruism is the value of 0 which estimates the 'trade off' between self-interest and the interest of others in the community. In order to estimate this, the problems which are inherent in previous empirical work, as noted above, are met head on by asking individuals to reveal the trade off. The approach is first to ask the voter: (i) how he would vote with respect to a specific government policy and then (ii) how he would vote if the goal was purely self interest. Finally, the same question is asked, but this time when the respondent considers only the 'public interest'.
The advantage of this approach is to force the respondent to confront the issue of what is to be foregone in the pursuit of public interest. Against this, however, there is no sense in which the respondent could be deemed non-altruistic if the same answer were given in all three cases, i.e. the respondent would simply be saying that, on this issue at least, what is good for him is also good for the community. Even so, in the literature on the 'ethical voter' and, indeed, in the usual layman's interpretation of altruism the key consideration is a trade-off, with the altruist foregoing (or making a sacrifice) for others. To the extent that this trade-off may be considered to be at the heart of the literature on the 'ethical voter' it is this that we seek to estimate. Our empirical test is then an attempt to estimate coefficients which are implied by Mueller's (1987) definition. The broader philosophical debate as to whether or not this is altruism raises more
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fundamental questions. 3 Nevertheless, for policy purposes it is by no means unimportant to consider the trade-off which individuals will willingly countenance in terms of foregoing self-interest for public concern.
Of course, all the other usual problems of questionnaire analysis also apply to our analysis. In order to minimize these problems we have undertaken question- naires at times when the questions that were posed were central in media coverage of budgetary and political events. Respondents would already have had an opportunity to consider the issues. Also we have taken two 'snap shots', one in 1988 and one in the election charged atmosphere of April 1992. We have looked for consistency and have checked our findings against those of a national poll taken in 1992. Of course, the reliability of responses in a questionnaire study will always be a matter of concern. However, we would emphasise that the gains to using this approach, rather than one based on voter behaviour, is that the distinction between self-interest and altruism is not forced onto the results. It comes from individuals' own assessments and we would argue that this is the relevant source when deciding on whether individuals are prepared to trade off self-interest for altruism.
3. An estimate of altruism
The empirical work is based upon two surveys carried out in the English city of Bath. The first, of 466 voters, was carried out in March 1988. The second, of 345 voters, was carried out in April 1992, immediately prior to the election campaign of May 1992. Individuals were asked to state their preferences with respect to a tax or government spending decision. The exact question asked was:
Suppose the government had to choose between the following options, which should it choose?
The options were: (i) reduce taxes and spend less on health, education and social benefits, (ii) keep taxes and spending upon these services at the same level as now and (iii) increase taxes and spend more on these services. These were scaled 1 to 3 respectively. As already noted, they were asked to answer under three different situations concerning: (i) which policy they favoured, (ii) which they thought would be in their self-interest and (iii) which they thought would be
3 Lewis (1982) draws attention to a quite important point in this context. He notes (p. 103) that "apparent preferences for redistribution should be interpreted with caution, as they may simply reflect support for the status quo". People may well act 'altruistically' so as to appease groups who might otherwise mobilize to pursue even greater redistribution schemes. The trade-off is not in fact altruistic but a 'price' they pay to avoid trouble and enjoy a 'quiet life'. We can not discount this possibility in our responses.
J. Hudson, P.R. Jones/European Journal of Political Economy 10 (1994) 499-509
Table 1 Cross tabulations of the survey responses a
a For the attitudes a 1 denotes reduce taxes and spending, 2 keep both the same and 3 increase both taxes and spending.
in the public interest. The ordering of these questions was designed to first elicit their preferences and then to discover whether they could perceive a difference between self-interest and public interest. The ordering was chosen so as to minimise, as far as possible, the impact that question order can have on response (Bishop et al., 1985; Lau et a1.,1990; Zaller and Feldman, 1992). In this context we felt that the greatest danger was answers based on self-interest and public interest attitudes, ff provided first, would affect the answers to their overall attitudes. Our choice of ordering precluded this possibility. Further details on these questions and others relating to socio-economic factors can be found in an appendix at the end of the paper.
A breakdown of the answers to these questions for both surveys combined is given in Table 1. This shows that general attitudes appear to be more closely aligned with public interest attitudes. Although, even for these two responses, there are large numbers of respondents whose responses differed. However, there was still more disagreement between the self-interest and public interest responses. These are not shown in the table but 445 of the 811 responses differed for these two questions. In general there was a tendency for the self-interest response to favour lower taxes than the public interest response.
Mueller's exact equation is not estimated directly, as it relates to an objective function the agent is attempting to maximise, rather than policies which enter this maximisation decision. Instead we assume that general attitudes to taxes and public expenditure (TA g) are determined by a weighted average of people's perceptions of their own interests (TA s) together with what they perceive to be in the public interest (TAP):
Ta g = otTA p + (1 - ot )Ta s. (2)
In Eq. (2), if individuals are entirely selfish, then a will equal zero, and TA g
will simply equal TA ~. If, on the other hand they are entirely altruistic, (i.e. put no weight on their own interests but consider only the public interest) then a will equal one. Thus we can consider c~ to be a measure of 'altruism', and we refer to it as the 'coefficient of altruism'. It is bounded between zero and one, and the closer to one it gets the more 'altruistic' is the individual. Eq. (2) is similar to Eq.
504 J. Hudson, P.R. Jones ~European Journal of Political Economy 10 (1994) 499-509
(1). We are proxying ,~Uj by TA p. In order to measure the coefficient of altruism for a group of individuals we simply need to estimate Eq. (2). Because the dependent variable is discrete the ordered probit technique is used rather than OLS.
This estimation helps identify the extent to which individuals are altruistic in their behaviour. However, more is possible with the data at hand. To help identify more exactly the factors which determine altruism it is necessary to specify an equation for t~. We will suppose that it is a linear function of a set of independent variables (X):
=f(x) . (3) Substituting (3) into (2) we get:
TA g = f ( X ) T A p + (1 - f ( X ) )TA s
= TA ~ + f ( X ) ( T A P - TA~). (4) Estimating this equation provides an estimate of the functional relationship
determining the coefficient of altruism. We shall again use the technique of ordered probit. This requires a constant term and the exact specification of the equation we will be estimating is
TAg = flo + fl l TA~ + f12 TAp -I- f l aXI (TA p - TA s) + . . .
+ ~,+ 2 Xk (TAP - TA~), (5) where X i denotes the ith independent variable in the set X.
The variables which are likely to determine t~ in Eq. (3) are those akeady indicated by empirical work on voluntary contributions to charities and other examples of altruism. Education has been noted as increasing voluntary contribu- tions to charities (Schiff, 1989, p. 133). The relative weight that people give to the public interest over self-interest is likely to increase with greater awareness and understanding of the community's problems. Similarly concern with the commu- nity may increase as individuals are informed about community issues and newspaper readership is considered as an additional variable.
It is well known that the propensity to give to charities "increases dramatically with age" (Auten and Rudney, 1989, p. 80). A number of explanations are noted. Jenks (1987) suggests that generations born in the early twentieth century show greater concern throughout their lifetime. Auten and Rudney also suggest that the influence of religion and institutional commitment increase with age. As a consequence we will be including a dummy variable for the old, the exact definition of which can be found in an appendix. In addition, gender may be important when considering altruism. Sawyer (1965) undertook experiments in which various groups rated different outcomes that benefitted others and found that women were more altruistic than men (see also Lea et al. (1987)). Finally, income is included as it is widely accepted that altruism is a normal good, increasing with income (Collard, 1978).
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4. Results
A standard probit regression of general tax attitudes on tax attitudes based on self-interest and the public interest yielded the results shown in Table 2. Concen- trating upon the results from the 1988 survey, we note that attitudes based on the public interest are more than twice as important, as measured by the respective coefficients, in determining overall attitudes to taxation than attitudes based on self-interest. The fit of the equation is very good. The two coefficients do not sum to one which is partially because we are using probit regression. Proportionately adjusting the coefficients so that together they sum to one results in an estimated coefficient of altruism of 0.6555.
The second regression, shown in columns two and three of Table 3, relates to Eq. (5). The right-hand side variables, other than the two attitudinal ones, are proxying f ( X ) in (4) and hence this regression estimates the general determinants of altruism. Newspaper readers in 1988 tend to be more altruistic than non-news- paper readers. Similarly, the more educated a person is the more altruistic he becomes. The same is true for the elderly, which is consistent with the conclusions of Jenks and Auten and Rudney referred to earlier. Gender is also significant at the 10% level and the results suggest that men are less altruistic than women, which is again consistent with the earlier results of Sawyer. None of the remaining variables are significant at the 10% level of significance.
The proportion of respondents from the 1992 sample who preferred higher taxes and public spending was 70%. This closely matches the 69% who expressed a preference for increased public spending rather than tax cuts in a survey carried out between 21-25 February of some 993 people throughout Great Britain by Market and Opinion Research International (MORI). The results of this survey were published in the Sunday Times on March 1, 1992 and the closeness of this result to ours is testimony to the validity of our survey. It is interesting to note that
Table 2 Regression results for general attitudes to taxation and government spending
** Denotes significance at the 5% level of significance. * Denotes significance at the 10% level of significance. The 10%, 5% and 1% critical values are 1.65, 1.96 and 2.58 respectively for all regressions.
in another question asked by MORI some 58% of respondents preferred a rise in the threshold at which people start paying tax compared with the 33% who preferred a reduction in the basic rate of income tax. The former benefits the lower paid more than the average tax payer and a majority preference for this option is further evidence that people take into account the public interest as well as their own self-interest when answering such questions.
The third and fourth columns of Table 2 illustrate the results of the probit regressions with general attitudes as the dependent variable and public and self-interest attitudes as to the two independent variables. The results from the 1992 sample are similar to those just discussed. The decline in significance of the chi-squared statistic may be explained by the reduction in the sample size. Both public attitudes and self-interest attitudes are significant with the former again being the most significant. The normalised coefficient of altruism has risen slightly to 0.7261. The results shown in the third and fourth columns of Table 3 show slightly more changes, with the newspaper related dummy variable, the variable 'o ld ' , and gender all now insignificant 4. Some reduction in significance is likely given the reduced size of this second sample. Nonetheless, education remained
4 We are grateful for the suggestion made by an anonymous referee that both newspaper readership and education would be significant in 1988, but not in 1992, because in 1992 newspapers reported the subsidy element in public expenditure on education spending.
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significantly negative at the 5% level, whilst those on high incomes were now significant at the 10% level. The signs of both these variables were unchanged from the previous regression. Overall, there are no significant contradictory signs between the two regressions.
It can be seen from the data appendix that the format of the age and education variables differed in the two data sets. This was to determine whether the results were sensitive to changes in definitions. In the case of education, at least, this seems definitely not to have been the case. A dummy variable for high income earners instead of income itself (or some nonlinear variant of it) has been used because it proved more significant. Replacing high income with income or the log of income in the regression in Table 3 would not have yielded significant results. The sign on the coefficient relating to high income is negative in the regressions for both years and the t statistic is greater than one, even in 1988. Thus we feel that the cumulative evidence for an income effect is reasonably strong. This is reinforced by the results from a pooled regression shown in the final two columns of Table 3. In this regression education and income are both significant at the 5% level. Because of the definitional differences in the data noted earlier, the educational variable was redefined as a binary variable taking a value of one if the respondent did not leave school before the sixth form. The negative sign therefore again indicates that more education leads to altruistic behaviour. It was not possible to redefine 'old ' in a consistent manner in both samples, which is why it enters the regression as two separate variables. As before it is significant for those interviewed in 1988, but not for those interviewed in 1992.
5. Conclusions
This paper has given significant support to the concept of an ethical voter put forward by Mueller (1987), confirming that perceptions of the public interest have considerable influence in determining policy preferences. It offers a new approach to measuring altruism and the effect of altruism on the voters' preferences. The approach meets many of the criticisms that undermine alternative estimates. We have shown that it is possible to construct a scalar index of altruism for a set of individuals and to determine how this index varies with certain socio-economic variables. We have also illustrated how this can be done in practice using two sample surveys.
While results from sample surveys must be treated with caution, we have argued that there is reason to believe that 'public concern' may be more important than self-interest in the preferences that voters reveal. Moreover, there is further confirmation that the levels of education and of income are important determinants of altruism. The impact of other socio-economic variables appears to vary over time and we recognise the need to repeat this exercise with a larger more widely based sample.
508 J. Hudson, P.R. Jones~European Journal of Political Economy I0 (1994) 499-509
Our results call into question the assumption common in the public choice literature that individuals' behaviour is motivated solely by self-interest. Evidence of altruism emerging from the political process may well be a reflection of the preferences of participants, rather than grounds for questioning that the electorate's wishes are being systematically distorted. While not suggesting that the political process is devoid of criticism, there is scope for arguing that any altruism that emerges is related to the existence of the 'ethical voter'.
Appendix A
Table A.1 Variables"
Public-interest
Self-interest attitudes
General at- titudes
Gender
Read paper
Education
Old
Income
High income
The response to a question which asked Suppose the government had to choose between the following options, which should it choose. Answer in terms of what you regard as best for the country as a whole, ignoring your own interests. The options were: (i) reduce taxes and spend less on health, education and social benefits, (ii) keep taxes and spending upon these services at the same level as now, an~d (iii) increase taxes and spend more on these services. These were scaled 1 to 3 respectively.
The response to a similar question as for altruistic attitudes, but answered in terms of what the respondent believes to be best for his own interest.
The response to a similar question as for altruistic attitudes, but answered in terms of what the respondent believes to be best overall taking into account the respondent's own interests and the country's.
= 1 if the respondent was a man.
= 1 ff the individual regularly read a newspaper.
= In the 1988 paper, this took the form of a variable scaled 1 to 3 reflecting when the individual left full time education, responses are before the sixth form, during the sixth form, further education. In the 1992 paper it was scaled one to five depending upon whether the individual left school before 16, at 16, at 17 or 18, between 19 and 22, 23 and over.
= A variable equal to one if the respondent was aged 65 or over, in the 1992 sample, this was changed to 60 or over.
A variable scaled from 1 to 6 respectively as the respondent's family income is under £10,000, between £10,000 and £15,000, between £15,000 and £20,000, between £20,000 and £25,000, between £25,000 and £30,000 and more than £30,000.
= A variable equal to one if the respondent earns £25,000 or more.
a Unless otherwise stated all variables are dichotomous, i.e. zero-one dummy variables.
J. Hudson, P.R. Jones ~European Journal of Political Economy 10 (1994) 499-509 509
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