Reference points and redistributive preferences: Experimental evidence

Jimmy Charité, Raymond Fisman, Ilyana Kuziemko and Kewei Zhang

Journal of Public Economics, 2022, vol. 216, issue C

Abstract: We explore whether individuals, when acting as social planners, respect others’ reference points. We allow subjects to redistribute unequal, unearned initial endowments between two anonymous recipients. Subjects redistribute twenty percent less when recipients know their initial endowments (and thus may have formed corresponding reference points) than when the recipients do not know their initial endowments, in which case we observe near-complete redistribution. The result holds for both within- and between-subject comparisons and is robust to a number of variants in design. The extensive margin response (redistributing zero versus any amount) drives the difference, further suggesting that respect for reference points drives the observed limited redistribution.

Keywords: Redistributive preferences; Taxation; Reference dependence (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Reference Points and Redistributive Preferences: Experiment Evidence (2016)
Working Paper: Reference Points and Redistributive Preferences: Experimental Evidence (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:216:y:2022:i:c:s0047272722001633

DOI: 10.1016/j.jpubeco.2022.104761

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