Aggregation Reversals and the Social Formation of Beliefs

Edward Ludwig Glaeser () and Bruce Sacerdote

No 13031, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the past two elections, richer people were more likely to vote Republican while richer states were more likely to vote Democratic. This switch is an aggregation reversal, where an individual relationship, like income and Republicanism, is reversed at some level of aggregation. Aggregation reversals can occur when an independent variable impacts an outcome both directly and indirectly through a correlation with beliefs. For example, income increases the desire for low taxes but decreases belief in Republican social causes. If beliefs are learned socially, then aggregation can magnify the connection between the independent variable and beliefs, which can cause an aggregation reversal. We estimate the model's parameters for three examples of aggregation reversals, and show with these parameters that the model predicts the observed reversals.

JEL-codes: A1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-pol and nep-soc
Date: 2007-04
Note: PE POL
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