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Ego- vs. Sociotropic: Using Survey Experiments to Understand Individuals’ Trade Preferences

Lena Maria Schaffer and Gabriele Spilker

Papers from World Trade Institute

Abstract: Economic self-interest has been central to explaining individual trade preferences. Depending on the theoretical trade model different variables should influence individuals’ attitude towards globalization. Existing research has come to different conclusions as to whether individuals’ preferences are dependent on their skills (i.e. their level of education), their income or the sector in which they are employed. Other studies depart from economic self- interest by arguing that it is not economic self-interest that motivates individuals to form their preference, but country-level economic factors (sociotropic considerations) instead (Fordham 2008, Mansfield and Mutz 2009). We argue that one needs to approach this empirical incoherence from an information-based perspective, as the predictions of the different trade models are not mutually exclusive. We pick up the informational critique most prominently portrayed in Fordham and Kleinberg (2012), namely we question whether people know that they belong to the category of winners and losers and we test experimentally how people react if they are aware that they personally or nationally will gain or lose from trade and which of the two aspects (personal vs.national gains or losses) are more important. By using survey experiments are we able to differentiate whether a person was triggered by ego- or socio- tropic benefits/costs of free trade. We accordingly conducted several online survey experiments, in which we rely on informational treatments. Overall, our results lend more support to a factor-based reasoning on trade than for the sector-based mechanism. In addition, we do not find much evidence for a sociotropic view of trade openness. These results are bad news for policy makers since their ability to increase support for further trade liberalization by telling citizens that their country will profit from this process seems to be rather limited.

Date: 2013-05-23
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