Repeated Shocks and Preferences for Redistribution

Giovanni Gualtieri, Marcella Nicolini, Fabio Sabatini and Luca Zamparelli
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Giovanni Gualtieri: National Research Council, Institute of Biometeorology
Marcella Nicolini: University of Pavia, Department of Economics and Management
Fabio Sabatini: Sapienza University of Rome, Department of Economics and Law
Luca Zamparelli: Sapienza University of Rome, Department of Economics and Law

No 2018.15, Working Papers from Fondazione Eni Enrico Mattei

Abstract: A society that believes wealth to be determined by random “luck” rather than by merit, demands more redistribution. The theoretical literature shows that any increase in the volatility of income caused by unpredictable adverse shocks implies a higher support for redistribution. We present evidence of this behavior by exploiting a natural experiment provided by the L’Aquila earthquake in 2009, which hit a large area of Central Italy through a series of destructive shakes over eight days. Matching detailed information on the ground acceleration registered during each shock with survey data about individual opinions on redistribution we show that the average intensity of the shakes is associated with subsequent stronger beliefs that, for a society to be fair, income inequalities should be levelled by redistribution. The shocks, however, are not all alike. We find that only the last three shakes - occurred on the fourth and the eighth day of the earthquake - have a statistically significant impact. Overall, we find that the timing and repetition of the shock play a role in shaping redistributive preferences.

Keywords: Redistribution; Inequality; Natural Disasters; Earthquakes; Multiple Shocks (search for similar items in EconPapers)
JEL-codes: D63 D69 H10 H53 Z1 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-ltv, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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