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- Convenor:
-
Odd-Helge Fjeldstad
(Chr. Michelsen Institute)
- Stream:
- J: Structural transformation
- Location:
- G6
- Start time:
- 28 June, 2018 at
Time zone: Europe/London
- Session slots:
- 1
Short Abstract:
This panel will explore new experimental evidence on citizen preferences for redistribution and taxation using experimental methods. The included papers will explore variations in preferences according to country context, social and professional background, gender and other relevant dimensions. Importantly, the panel will also analyse the extent to which preferences are responsive to information about the state of inequality, social mobility, and the political context. Implications of the studies for tax legitimacy and redistributive policy will be discussed.
Accepted papers:
Session 1Franziska Mager (Oxfam GB) Christopher Hoy (Australian National University)
Paper short abstract:
We investigate if it is possible to increase people's support for the government to address inequality by providing information about inequality and social mobility. We test this through RCTs with over 50,000 online survey participants in 12 countries that make up over 1/3 of the global population.
Paper long abstract:
Using new cross-country survey and experimental data, we investigate if it is possible to increase people's support for the national government to address inequality through redistribution by providing them with information about inequality and social mobility in their country. We test this by conducting randomized control trials with over 50,000 online survey participants in 12 countries that make up over one third of the global population and produce more than 40% of world GDP. Respondents were randomly allocated to receive either information about inequality and social mobility in their country, information about their position in the national income distribution or no information (control group). This is the first study to examine the effect of providing different types of information about inequality in the same field experiment and to include multiple middle income countries. Our key findings are as follows. Firstly, people's concern about inequality is elastic to information in all countries but the effect varies in direction and by type of information, whereas preferences for redistribution are only elastic to information in some countries. Secondly, in the majority of countries we studied, information about people's position in the national income distribution reduces their concern about inequality if they overestimated their position (ie. they were poorer than they thought), which is inconsistent with most existing theories. Finally, in high-income countries, information about inequality and social mobility generally only affects the preferences for redistribution of people who would not vote for one of the two major political parties in their country.
Arne Wiig (Chr Michelsen Institute) Odd-Helge Fjeldstad (Chr. Michelsen Institute) Ivar Kolstad (Chr. Michelsen Institute)
Paper short abstract:
Based on a discrete choice experiment, citizen preferences for taxation do not seem to reflect considerations of efficiency and inequality. People rather respond to simple arguments related to the nationality of company owners and local employment effects.
Paper long abstract:
Optimal tax theories typically include efficiency and inequality in the objective function of the government. However, it is unclear how well this objective function reflects how ordinary citizens think about taxation. In a field experiment in Tanzania, respondents randomly assigned to two treatment groups were asked to explicitly state the tax implications of focusing on efficiency and inequality, respectively. Their tax decisions were measured using a discrete choice experiment, and responses compared to those of a control group stating their own tax preferences. The results show that the responses in the three conditions are virtually indistinguishable. In other words, in a situation of some complexity, citizen preferences for taxation do not seem to reflect considerations of efficiency and inequality. The result holds even if we control for respondents with a poor understanding of the task given. Results from the control group instead suggests that people respond to simple arguments related to the nationality of company owners and local employment effects. This has implications for the understanding of the arguments used in tax debates, and for the political economy of taxation more generally.
Ivar Kolstad (Chr. Michelsen Institute) Arne Wiig (Chr Michelsen Institute) Odd-Helge Fjeldstad (Chr. Michelsen Institute)
Paper short abstract:
When confronted with information that ordinary citizens do not care that strongly about efficiency, does this change economists' views of optimal public policy? This paper presents results from a field experiment on tax preferences conducted among students of economics in Tanzania.
Paper long abstract:
Experimental evidence indicates that economists are more concerned with efficiency than non-economists. When confronted with information that ordinary citizens do not care that strongly about efficiency, does this change economists' views of optimal public policy? This paper presents results from a field experiment on tax preferences conducted among students of economics in Tanzania. A treatment group was primed with information that ordinary citizens do not agree with implications of efficiency-based optimal tax theory. Tax preferences were then measured using discrete choice experiments. The results show that the treated economists modify their position partly, but not fully, in the direction of public opinion. Economists can hence be viewed as part democrats and part technocratic paternalists. We find no evidence that the treatment effect is driven by confusion, priming on distributional issues, or experimenter demand effects.