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Economic and Class Voting in a Model of Redistribution with Social Concerns

Andrea Gallice () and Edoardo Grillo

No 448, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: We investigate how concerns about social status may affect individuals?preferences for redistribution. In our model, agents are heterogeneous across two dimensions, productivity and social class, and an individual?s social status is de?ned as his relative standing in terms of a weighted average of these two components. The weight on each component depends positively on its standard deviation. Redistribution thus simultaneously affects labor supply and the weights that determine social status. As such, taxation not only redistributes resources from the rich to the poor but also becomes a way of preserving or modifying social status. Thus, individuals who have the same productivity but belong to different social classes support different tax rates. We characterize the equilibrium of the political game as the solution of a system of non-linear equations and identify the interclass coalition of voters who support the equilibrium tax rate.

Keywords: economic voting; class voting; social status; voting; redistribution. (search for similar items in EconPapers)
JEL-codes: D10 D63 H23 (search for similar items in EconPapers)
Pages: pages 31
Date: 2016
New Economics Papers: this item is included in nep-cdm and nep-pol
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