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Redistribution and beliefs about the source of income inequality

Vanessa Valero ()
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Vanessa Valero: Loughborough University

Experimental Economics, 2022, vol. 25, issue 3, No 5, 876-901

Abstract: Abstract Previous literature demonstrates that beliefs about the determinants of income inequality play a major role in individual support for income redistribution. This study investigates how people form beliefs regarding the extent to which work versus luck determines income inequality. Specifically, I examine whether people form self-serving beliefs to justify supporting personally advantageous redistributive policies. I use a laboratory experiment where I directly measure beliefs and manipulate the incentives to engage in self-deception. I first replicate earlier results demonstrating that (1) people attribute income inequality to work when they receive a high income and to luck when they receive a low income and (2) their beliefs about the source of income inequality influence their preferences over redistributive policies. However, I do not find that people’s beliefs about the causes of income inequality are further influenced by self-serving motivations based on a desire to justify favorable redistributive policies. I conclude that, in my experiment, self-serving beliefs about the causes of income inequality are driven primarily by overconfidence and self-image concerns and not to justify favorable redistributive policies.

Keywords: Redistribution; Fairness; (Motivated) Beliefs; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: D31 D63 D64 D83 H23 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10683-021-09733-8

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