Can information about inequality and social mobility ... · Can information change how people respond to inequality? Other Countries the effect is driven by people: 1) Prefer low

ScottH. Irwin

Can information about inequality and social mobility change people’s support for redistribution?

Evidence from Randomized Control Trials in 12 countries

Can information change how people respond to inequality? 1

Christopher Hoy

Australian National University9 August 2018

Christopher Hoy

Scott H. Irwin

Should Gina have to pay taxes to fund welfare payments?

Introduction to Fake Beamer 2Can information change how people respond to inequality?Christopher Hoy Can information change how people respond to inequality?

Christopher Hoy and Franziska Mager Can information change how people respond to inequality?

Christopher Hoy

Scott H. Irwin

Another way of thinking about this…


Christopher Hoy and Franziska Mager Can information change how people respond to inequality?

Christopher Hoy

Scott H. Irwin

Stylised facts about misperceptions of inequality and social mobilityEconomic theory behind why these misperceptions matterDesign of the randomised control trials I conductedResults and discussion

Outline

Introduction to Fake Beamer 4Can information change how people respond to inequality?Christopher Hoy

Scott H. Irwin


Outline


Scott H. Irwin

Studies have shown (1) people tend to overestimate the degree of social mobility in their country

Introduction to Fake Beamer 6

Davidai et al, 2015

Who cares about inequality?Christopher Hoy and Franziska Mager Can information change how people respond to inequality?

Christopher Hoy and Franziska Mager Can information change how people respond to inequality?Christopher Hoy

Scott H. Irwin

Studies have shown (2) people tend to underestimate the level of inequality in their country

7Who Cares About Inequality?Christopher Hoy

Norton et al, 2014

Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Who cares about inequality?Christopher Hoy and Franziska Mager Can information change how people respond to inequality?


Scott H. Irwin


Outline


Scott H. Irwin

Utility for individual i, is as follows

Forms the basis of seminal theories in economics of preferences for redistribution

Meltzer Richard Hypothesis (1981)Prospect of Upward Mobility (Benabou and Ok, 2001)

Economic theory behind why these misperceptions matter

Introduction to Fake Beamer 9Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?

Christopher Hoy and Franziska Mager

Alesina et al, 2011

Can information change how people respond to inequality?Christopher Hoy

Scott H. Irwin

Utility for individual i, is as follows

Forms the basis of seminal theories in economics of preferences for redistribution

Meltzer Richard Hypothesis (1981)Prospect of Upward Mobility (Benabou and Ok, 2001)

Economic theory behind why these misperceptions matter

Introduction to Fake Beamer 10Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?


Minimise


Alesina et al, 2011

Scott H. Irwin

Existing studies have not directly tested the hypothesis that information about inequality AND social mobility will increase support for redistribution


Consistent(Kuziemko et al 2015,

Zilinsky 2014, Alesina et al 2018)

People like inequality(Alesina and

Angeletos, 2005)

Information can have a ‘Backfire’ effect

(Nyhan and Reifer, 2010)

Inconsistent

People overestimate inequality and

underestimate mobility(Niehues 2014)

Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?


Scott H. Irwin

The Myth of the American Dream



Scott H. Irwin






Angeletos, 2005)



Inconsistent





Scott H. Irwin


Outline


Scott H. Irwin

30,000 respondents in 12 countries that make up 1/3 of world’s population (Australia, Denmark, India, Indonesia, Mexico, Morocco, Netherlands, Nigeria, South Africa, Spain, the United Kingdom and the United States)

Experimental design to test effect of correcting misperceptions

15

Around 4500 respondentssplit randomly into 3

nationally representative groups in each country

Treatment Group:Overall level of inequality ANDDegree of social

mobility

Control group: No information

Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Can information change how people respond to inequality?


Scott H. Irwin

Example of what is provided to Treatment Group


Alesina et al 2018, Kuziemko et al 2015

Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?


Scott H. Irwin

Questions asked after the treatment


ISSP 2009, Indrakesuma 2015

Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Christopher Hoy

Scott H. Irwin


Outline


Scott H. Irwin

Effect of Treatment

19Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?Christopher Hoy

Scott H. Irwin

Effect of Treatment


6.2***

4.9**3.9*

-6.7***

-10

-50

5G

over

nmen

t res

pons

ible

for c

losi

ng g

ap (p

p di

ff T

vs C

)

UK AustraliaDenmark US

Scott H. Irwin






Angeletos, 2005)



Inconsistent





UK,Australia,Denmark

USA


Scott H. Irwin

Effect on policy priorities of Australians


.45

.5.5

5.6

Shar

e of

pop

ulat

ion

that

opp

ose

corp

orat

e ta

x cu

ts

TREATMENT GROUP CONTROL GROUP.1

6.1

8.2

.22

.24

.26

Shar

e of

pop

ulat

ion

prio

rtise

edu

catio

n an

d he

alth

TREATMENT GROUP CONTROL GROUP

Scott H. Irwin


QUESTIONS


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EXTRA SLIDES


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Questions asked after the treatment (2)


Model and Related LiteratureMethodology

Indrakesuma 2015


Scott H. Irwin

Information reduced support for social protection in India, Nigeria, South Africa, Morocco, Indonesia and the United States

Information had a limited effect on people’s preferences for what policies the national government should pursue



DataResults


Scott H. Irwin

SPAIN INDIA

MOROCCO NIGERIA

1. Telling People they are poorer than what they thought lowered their concern about inequality (1)


.65

.7.7

5.8

Agre

eGap

TooL

arge

(N = 844) (N = 805) ***

Control TreatmentA

.78

.8.8

2.8

4.8

6Ag

reeG

apTo

oLar

ge

(N = 1067) (N = 934) ***

Control TreatmentA

.84

.86

.88

.9.9

2Ag

reeG

apTo

oLar

ge

(N = 1252) (N = 1193) ***

Control TreatmentA


.7.7

2.7

4.7

6.7

8Ag

reeG

apTo

oLar

ge

(N = 964) (N = 894) *

Control TreatmentA

Can information change how people respond to inequality?


Scott H. Irwin

NETHERLANDS SOUTH AFRICA

MEXICO



.58

.6.6

2.6

4.6

6.6

8Ag

reeG

apTo

oLar

ge

(N = 772) (N = 753) **

Control TreatmentA

.8.8

2.8

4.8

6.8

8Ag

reeG

apTo

oLar

ge

(N = 956) (N = 885) ***

Control TreatmentA

.78

.8.8

2.8

4.8

6Ag

reeG

apTo

oLar

ge

(N = 927) (N = 847) *

Control TreatmentA

Can information change how people respond to inequality?Christopher Hoy Can information change how people respond to inequality?


Scott H. Irwin

Consistent(Cruces et al 2013,

Bublitz 2016, Karadja et al 2017)

Inconsistent

People use their living standard as a

benchmark for what is acceptable for others

(Nair 2016)

Poorer people are happy that there are

people who are poorer then them

(Kuziemko et al, 2014)

H1:Telling People they are Poorer then they thought will increase their concern about inequality and support for redistribution (vice a versa)

Introduction to Fake Beamer 29Christopher Hoy Can information shape preferences for redistribution?

Spain, India, Mexico, Nigeria

Netherlands,South Africa,

Morocco


Effect driven by people:1) In bottom 40% of

distribution2) Who prefer low

inequality3) Who would prefer

inequality to be lower than what they perceive it to be



Scott H. Irwin

UNITED KINGDOM DENMARK

AUSTRALIA UNITED STATES

2. Telling People about inequality and mobility sometimes increased support for redistribution (except in the US)


.5.5

2.5

4.5

6.5

8.6

Gov

Res

pons

ibilit

y

(N = 1078) (N = 870) ***

Control TreatmentB

.66

.68

.7.7

2.7

4.7

6G

ovR

espo

nsib

ility

(N = 971) (N = 960) ***

Control TreatmentB

.52

.54

.56

.58

.6.6

2G

ovR

espo

nsib

ility

(N = 974) (N = 974) *

Control TreatmentB


.6.6

2.6

4.6

6.6

8G

ovR

espo

nsib

ility

(N = 831) (N = 877) **

Control TreatmentB



Scott H. Irwin

H2: Telling people about inequality and mobility in their country will increase their concern about inequality and support for redistribution




)

People like inequality

(Alesina and Angeletos, 2005)



Inconsistent



Christopher Hoy Can information shape preferences for redistribution?

UK, Denmark,Australia

US


Other Countries the effect is driven by people:1) Prefer low

inequalityUS the effect is driven by people:1) Perceive there is

low inequality2) Prefer inequality

to be higher



Scott H. Irwin

INDIA SOUTH AFRICA

NIGERIA INDONESIA

3. Information decreases support for social protection, rarely increases support taxes and sometimes reduces support for taxes (1)


.04

.06

.08

.1.1

2.1

4So

cial

Prot

ectio

n

(N = 703) (N = 650) ***

Control TreatmentA

.03

.04

.05

.06

.07

.08

Soci

alPr

otec

tion

(N = 775) (N = 685) *

Control TreatmentA

.1.1

2.1

4.1

6.1

8So

cial

Prot

ectio

n

(N = 906) (N = 922) **

Control TreatmentB


-.05

0.0

5.1

Soci

alPr

otec

tion

(N = 152) (N = 163) **

Control TreatmentA



Scott H. Irwin

SPAIN MEXICO

INDIA



.05

.1.1

5Ta

xonR

ich

(N = 194) (N = 207) **

Control TreatmentA

.04

.05

.06

.07

.08

.09

Taxo

nRic

h

(N = 652) (N = 631) **

Control TreatmentA


.05

.06

.07

.08

.09

.1Ta

xonR

ich

(N = 775) (N = 685) *

Control TreatmentA



Scott H. Irwin



0.0

5.1

.15

Taxo

nRic

h

(N = 242) (N = 208) **

Control TreatmentB

.05

.1.1

5.2

Cut

Cor

pora

teTa

x

(N = 131) (N = 106) **

Control TreatmentA


How did Republican voters respond to information about inequality?More supportive of corporate tax cuts Less supportive of taxes on the rich



Scott H. Irwin

1. People tend to underestimate extent of inequality 2. When presented with accurate information this does

not always change peoples views the way we would expect (eg. sometimes they become less concerned)

3. Example of the value in gathering people’s views and might be useful approach to use (eg online surveys)

4. Opportunity to explore projects where these misperceptions effect policies in developing countries (eg. self targeting of social protection programs)

Some reflections on what this might mean for ODI’s work



Scott H. Irwin

Overview of what I will cover today


To answer ‘Can information change the way people respond to inequality?’ …

Variations of the following are areas for further research

1. Existing misperceptions of inequality

2. Basis to believe misperceptions matter

3. Misperceptions are correlated with outcome of interest

4. Causal design to test effect of correcting misperceptions

1. Presentation of information2. Type of inequality3. Outcomes4. Specificity of information5. Context6. Specific theory7. Specific policy


Scott H. Irwin

Four conditions to answer this question:1. Existing misperceptions of inequality 2. Basis to believe misperceptions matter3. Misperceptions are correlated with outcome

of interest4. Causal design to test effect of correcting

misperceptions

Can information change the way people respond to inequality?


Four conditions

Scott H. Irwin

1. Existing misperceptions of inequality (1)


Norton et al 2014, Davidai et al 2015


Four conditions

Scott H. Irwin

1. Existing misperceptions of inequality (2)

39

UK NIGERIA INDIA US

010

2030

4050

percent

1 2 3 4 5 020

4060

percent

1 2 3 4 5

020

4060

percent

1 2 3 4 5

010

2030

4050

percent

1 2 3 4 5

SPAIN SOUTH AFRICA MOROCCO NETHERLANDS

010

2030

4050

percent

1 2 3 4 5

020

4060

percent

1 2 3 4 5 010

2030

4050

percent

1 2 3 4 5

020

4060

percent

1 2 3 4 5

MEXICO DENMARK AUSTRALIA INDONESIA

Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?

020

4060

percent

1 2 3 4 5 020

4060

percent

1 2 3 4 5 Can information change how people respond to inequality?

010

2030

4050

percent

1 2 3 4 5

Four conditions

Scott H. Irwin

Individual’s utility is dependent on (Fehr and Schmidt 1999, Alesina et al 2011):

Their level of consumptionTheir level of consumption relative to othersThe level of inequality and mobility in society

Forms the basis of seminal economics theories of preferences for redistribution

Meltzer Richard Hypothesis (1981)Prospect of Upward Mobility (Benabou and Ok, 2001)Range of theories where your position in distribution matters (Black 1948, Romer 1975, Piketty 1995)


Introduction to Fake Beamer 40Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?

Four conditions

Scott H. Irwin



0%

10%

20%

30%

40%

50%

60%

70%

80%TheGa

pbetweenRichandPooristooLarge

(Stro

nglyAgree)

Perceived tobeinthebottom40% Perceived tobeinthetop60%


Four conditions

Scott H. Irwin



0%

10%

20%

30%

40%

50%

60%

70%

80%TheGa


(Stro

nglyAgree)

PerceiveHighInequality PerceiveModerate toLowInequality


Four conditions

Scott H. Irwin

50,000 respondents in 12 countries that make up 1/3 of world’s population (Australia, Denmark, India, Indonesia, Mexico, Morocco, Netherlands, Nigeria, South Africa, Spain, the United Kingdom and the United States)


43



Treatment Group A: Place in distribution

Treatment Group B:Overall level of inequality ANDDegree of social

mobility


Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?

Four conditionsOur study

Scott H. Irwin

Example of what is provided to Treatment Group A



Cruces et al 2013, Karadja et al 2017


Scott H. Irwin

Example of what is provided to Treatment Group B





Scott H. Irwin



Inconsistent



(Nair 2016)





Introduction to Fake Beamer 46Christopher Hoy Can information shape preferences for redistribution?Can information change how people respond to inequality?


Scott H. Irwin






Angeletos, 2005)



Inconsistent





Scott H. Irwin

1. Telling People they are poorer than what they thought often lowered their concern about inequality

2. Telling People about inequality and mobility sometimes increased support for redistribution (opposite effect in the US)

3. Information decreases support for social protection, rarely increases support for taxes and sometimes reduces support for taxes

Three key results that emerge from study



Scott H. Irwin

SPAIN INDIA

MOROCCO NIGERIA



.65

.7.7

5.8

Agre

eGap

TooL

arge

(N = 844) (N = 805) ***

Control TreatmentA

.78

.8.8

2.8

4.8

6Ag

reeG

apTo

oLar

ge

(N = 1067) (N = 934) ***

Control TreatmentA

.84

.86

.88

.9.9

2Ag

reeG

apTo

oLar

ge

(N = 1252) (N = 1193) ***

Control TreatmentA


.7.7

2.7

4.7

6.7

8Ag

reeG

apTo

oLar

ge

(N = 964) (N = 894) *

Control TreatmentA


Scott H. Irwin

NETHERLANDS SOUTH AFRICA

MEXICO



.58

.6.6

2.6

4.6

6.6

8Ag

reeG

apTo

oLar

ge

(N = 772) (N = 753) **

Control TreatmentA

.8.8

2.8

4.8

6.8

8Ag

reeG

apTo

oLar

ge

(N = 956) (N = 885) ***

Control TreatmentA

.78

.8.8

2.8

4.8

6Ag

reeG

apTo

oLar

ge

(N = 927) (N = 847) *

Control TreatmentA



Scott H. Irwin



Inconsistent



(Nair 2016)






Spain, India, Mexico, Nigeria

Netherlands,South Africa,

Morocco




distribution2) Who prefer low

inequality3) Who would prefer

inequality to be lower than what they perceive it to be

Scott H. Irwin

UNITED KINGDOM DENMARK

AUSTRALIA UNITED STATES

2. Telling People about inequality and mobility sometimes increased support for redistribution (except in the US)


.5.5

2.5

4.5

6.5

8.6

Gov

Res

pons

ibilit

y

(N = 1078) (N = 870) ***

Control TreatmentB

.66

.68

.7.7

2.7

4.7

6G

ovR

espo

nsib

ility

(N = 971) (N = 960) ***

Control TreatmentB

.52

.54

.56

.58

.6.6

2G

ovR

espo

nsib

ility

(N = 974) (N = 974) *

Control TreatmentB


.6.6

2.6

4.6

6.6

8G

ovR

espo

nsib

ility

(N = 831) (N = 877) **

Control TreatmentB


Scott H. Irwin





)

People like inequality

(Alesina and Angeletos, 2005)



Inconsistent




UK, Denmark,Australia

US



Other Countries the effect is driven by people:1) Prefer low

inequalityUS the effect is driven by people:1) Perceive there is


to be higher

Scott H. Irwin

INDIA SOUTH AFRICA

NIGERIA INDONESIA



.04

.06

.08

.1.1

2.1

4So

cial

Prot

ectio

n

(N = 703) (N = 650) ***

Control TreatmentA

.03

.04

.05

.06

.07

.08

Soci

alPr

otec

tion

(N = 775) (N = 685) *

Control TreatmentA

.1.1

2.1

4.1

6.1

8So

cial

Prot

ectio

n

(N = 906) (N = 922) **

Control TreatmentB


-.05

0.0

5.1

Soci

alPr

otec

tion

(N = 152) (N = 163) **

Control TreatmentA


Scott H. Irwin

SPAIN MEXICO

INDIA



.05

.1.1

5Ta

xonR

ich

(N = 194) (N = 207) **

Control TreatmentA

.04

.05

.06

.07

.08

.09

Taxo

nRic

h

(N = 652) (N = 631) **

Control TreatmentA


.05

.06

.07

.08

.09

.1Ta

xonR

ich

(N = 775) (N = 685) *

Control TreatmentA


Scott H. Irwin



0.0

5.1

.15

Taxo

nRic

h

(N = 242) (N = 208) **

Control TreatmentB

.05

.1.1

5.2

Cut

Cor

pora

teTa

x

(N = 131) (N = 106) **

Control TreatmentA



How did Republican voters respond to information about inequality?More supportive of corporate tax cuts Less supportive of taxes on the rich

Scott H. Irwin

Where to from here?


Four Conditions Variations of the following are areas for further research







Where to from here


Scott H. Irwin

Presentation of information



Where to from here

Richest20%

Everyoneelse

Howwealthisdivided inAustralia

0 10 20 30 40 50 60 70

Richest20%

Poorest20%

Percent

Howwealthisdivided inAustralia

Scott H. Irwin

Type of inequality



Where to from here

1.5

22.

5La

bour

erPa

yRis

e

(N = 989) (N = 994) *

Control TreatmentB

Scott H. Irwin

Outcome of interest



Where to from here

.24

.26

.28

.3.3

2Vo

teAg

ains

tPre

side

nt

(N = 906) (N = 922) **

Control TreatmentB

Scott H. Irwin

Specificity of information



Where to from here

Kuziemko et al 2015, Engelhardt and Wagener 2016

Scott H. Irwin

Context



Where to from here

.5.5

2.5

4.5

6.5

8.6

Gov

Res

pons

ibilit

y(N = 1078) (N = 870) ***

Control TreatmentB

.66

.68

.7.7

2.7

4.7

6G

ovR

espo

nsib

ility

(N = 971) (N = 960) ***

Control TreatmentB

vs

United Kingdom United States

Scott H. Irwin

Piketty 1995 (Social Mobility and Redistributive Preferences)

Specific theory



Where to from here

Scott H. Irwin

Specific policy



Where to from here


Alatas et al, 2016

Scott H. Irwin

Four Conditions Variations of the following are areas for further research






A framework for further research in this area



Where to from here

Scott H. Irwin

US$20k – Replicate same experiment in ChinaUS$50k – Test 8 different types of ‘information interventions’ in UK or USUS$125k – Test Piketty’s 1995 Theory in IndonesiaUS$300k – Develop a research agenda with multiple trials in multiple countries

Response to Jonathan’s ‘wishlist’


Scott H. Irwin

ADDITIONAL SLIDES


Scott H. Irwin

Vary:Type of information (eg. absolute vs relative inequality)Type of inequality (eg. wage, education, health)Outcomes (eg. voting, charitable giving)Specificity (eg. inheritance taxes)Context (eg. nationwide study in China, focus group of elites at Davos 2019)Theory being tested (eg. Piketty’s 1995 model)

Where to from here?



Where to from here

Scott H. Irwin Introduction to Fake Beamer 69

15.4%

54.7%

30.3%

0%

10%

20%

30%

40%

50%

60%

Actuallymovedup Staysame Actuallymoveddown

ShareofRespondents

ActualMobility

ActualMobility between2000and2007

34.9%

57.5%

7.6%

0%

20%

40%

60%

80%

Actuallymovedup Staysame ActuallymoveddownShareofRespondents

ActualMobility

Perceivedchangeamongthosethatactuallymoveddown

38.6%

54.6%

6.8%

0%10%20%30%40%50%60%


ActualMobility

Perceivedchangeamongthosethatactuallymovedup

30.8%

62.6%

6.7%

0%

20%

40%

60%

80%


ActualMobility

Perceivedchangeamongthosethatstayedinthesameplace

Scott H. Irwin

CONTEXT: Most of the world’s population live in countries where inequality has been rising for decades

Introduction to Fake Beamer 70Can information shape preferences for redistribution?Christopher Hoy

World Inequality Report, 2017

Scott H. Irwin

Model and Related LiteratureMethodologyDataResultsDiscussion

Outline



DataResults

Discussion


Scott H. Irwin

ca = consumption of person A, cp = consumption of person poorer than ca, cr = consumption of person richer than ca, Beta = weighting of cp relative to own consumptionGamma = weighting of cr relative to own consumption

Key predictions:People are adverse to inequalityThey care more about the consumption of those richer than them

A Theory of Fairness, Competition and Cooperation


Fehr and Schmidt, 1999

Model and Related Literature


Scott H. Irwin

l denotes income differences due to luck, e denotes income differences due to effort

Captures seminal theories of preferences for redistributionMeltzer Richard Hypothesis (1981)Prospect of Upward Mobility hypothesis (Benabou and Ok, 2001)Range of theories where your position in distribution matters (Black 1948, Romer 1975, Piketty 1995)

Consumption differences overtime (ie. Social Mobility)


Alesina et al, 2011



Scott H. Irwin

cp(p) = perceived consumption of person poorer than ca cr(p) = perceived consumption of person richer than ca

Growing literature to show people tend to misperceiveThe level of inequality in their country (Norton et al 2011, Norton et al 2014, Indrakesuma 2015)The degree of mobility (Davidai et al 2015, Alesina et al 2018, Niehues2014)Their place in the distribution (Bublitz 2016, Hauser and Norton 2017)

The role of perceptions of others consumption


Gimpelson and Treisman, 2017



Scott H. Irwin

H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought

H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility

Two predictions of this model that I test




Scott H. Irwin

Consistent

Theory accurate(Cruces et al 2013,

Bublitz 2016, Karadjaet al 2017)

Placebo effect (Nair 2016)

Inconsistent

Poorer people are not averse to people being

poorer then them(Kuziemko et al, 2014)



(Nair 2016)





Scott H. Irwin



Consistent

Theory accurate(Kuziemko et al 2015, Zilinsky 2014, Alesina

et al 2018)

Placebo effect(Nair 2016)

Inconsistent

Tolerant of inequality(Alesina and

Angeletos, 2005)

Backfire effect(Nyhan and Reifer,

2010)


Overestimate inequality and



Scott H. Irwin

Design First study to include multiple treatment groupsCombine treatment on inequality and mobilitySolicit prior beliefs to enable exploring of channels

Scale 1/3 of world’s population, 10x more respondents in more countries than all other studies combinedFirst in multiple middle income countriesAdequate power to capture heterogeneous effects

How this study extends the literature




Scott H. Irwin

Conduct Online Field Experiments in 12 countries with over 50,000 respondents




Scott H. Irwin

Example of question asked prior to treatment




Scott H. Irwin




ISSP 2009, Indrakesuma 2015


Scott H. Irwin




Indrakesuma 2015


Scott H. Irwin

Design of Randomized Control Trials

83



Treatment Group A: Place in distribution

Treatment Group B:Overall level of inequality ANDDegree of social

mobility


Who Cares About Inequality?Christopher Hoy



Scott H. Irwin

Example of what is provided to Treatment Group A



Cruces et al 2013, Karadja et al 2017


Scott H. Irwin

Example of what is provided to Treatment Group B





Scott H. Irwin

where Yi is an indicator variable that takes on the value one for answer i to each question and zero for all other answers. T1 is an indicator variable that compares Treatment group A to the control group, T2 is an indicator variable that compares Treatment group B to the control group ∈is the model error term. 𝛼$%captures the share of respondents in the control group that selected answer i to each question. 𝛼&% captures the average difference between respondents in treatment group A and respondents in the control group that selected response i to the question𝛼'% captures the average difference between respondents in treatment group B and respondents in the control group that selected response i to the question.

Econometric Analysis




Scott H. Irwin

Misperceptions related to a respondent’s position in the national distribution (H1)

87

UK NIGERIA INDIA US

010

2030

4050

percent

1 2 3 4 5 020

4060

percent

1 2 3 4 5

020

4060

percent

1 2 3 4 5

010

2030

4050

percent

1 2 3 4 5

SPAIN SOUTH AFRICA MOROCCO NETHERLANDS

010

2030

4050

percent

1 2 3 4 5

020

4060

percent

1 2 3 4 5 010

2030

4050

percent

1 2 3 4 5

020

4060

percent

1 2 3 4 5

MEXICO DENMARK AUSTRALIA INDONESIA


020

4060

percent

1 2 3 4 5 020

4060

percent

1 2 3 4 5

010

2030

4050

percent

1 2 3 4 5


Data

Scott H. Irwin

Relationship between perceived position in distribution and agreeing the gap between rich and poor is too large



Data


0%

10%

20%

30%

40%

50%

60%

70%

80%TheGa


(Stro

nglyAgree)

Perceived tobeinthebottom40% Perceived tobeinthetop60%

Scott H. Irwin

Relationship between actual position in distribution and agreeing the gap between rich and poor is too large



Data


0%

10%

20%

30%

40%

50%

60%

70%

80%TheGa


(Stro

nglyAgree)

Actuallyinthebottom40% Actuallyinthetop60%

Scott H. Irwin

Misperceptions related to the level of the inequality in their country (H2)


0%

20%

40%

60%

80%

100%ShareofRespondents

Highinequality Moderate inequality Lowinequality


Data


Scott H. Irwin

Relationship between perception of the overall level of inequality and concern about inequality


0%

10%

20%

30%

40%

50%

60%

70%

80%TheGa


(Stro

nglyAgree)

PerceiveHighInequality PerceiveModerate toLowInequality


Data


Scott H. Irwin


Overestimated PlaceUnderestimate Place


Results



DataResults


Scott H. Irwin

Effect of Treatment A on people who were poorer than they thought



DataResults


Scott H. Irwin

Effect of Treatment A on people who were poorer than they thought



DataResults


Scott H. Irwin

Effect of Treatment A on people who were richer than they thought



DataResults


Scott H. Irwin

Effect of Treatment A on people who were richer than they thought



DataResults


Scott H. Irwin

Effect of Treatment B



DataResults


Scott H. Irwin

Effect of Treatment B



DataResults


Scott H. Irwin

Information reduced support for social protection in India, Nigeria, South Africa, Morocco, Indonesia and the United States Information increased support for taxes on the rich in Spain, Mexico and IndiaInformation increased support for corporate tax cuts in the United States among those people who overestimated their position

Information had a limited effect on people’s preferences for what policies the national government should pursue



DataResults


Scott H. Irwin

People overestimating their place in the distribution has lead to greater concern about inequality in many countriesMisperceptions of the overall level of inequality and mobility have sometimes reduced concern about inequality and support for redistributionThe opposite effects tend to be the case in the United States

Summary of key findings



DataResults


Scott H. Irwin

Misperceptions effect Voting behaviour in IndonesiaSupport for NGOs in MexicoBeliefs about why people are rich and poor in Australia, Indonesia and Mexico

Information about the overall level of inequality can moderate the effect of information about position in AustraliaInformation about just overall level of inequality (excluding mobility) has differing effects in Indonesia

Additional findings



DataResults


Scott H. Irwin

H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thoughtH2: Information about the level of overall inequality and social mobility in their country will lower people‘s utilityI discuss the results for the United States separately as they are very distinct

Discussion/Channels



DataResults

Discussion


Scott H. Irwin

Consistent




Inconsistent

Poor people are not averse to people being




(Nair 2016)




DataResults

Discussion

Scott H. Irwin

Consistent




Inconsistent





(Nair 2016)




distribution2) Perceive there is

moderate to low inequality

3) Prefer low inequality

4) Would prefer inequality to be lower


DataResults

Discussion

Scott H. Irwin



Consistent


et al 2018)



Angeletos, 2005)


2010)

Inconsistent




DataResults

Discussion


Scott H. Irwin



Consistent


et al 2018)



Angeletos, 2005)


2010)

Inconsistent




DataResults

Discussion


Effect driven by people (varied by country):1) Perceive there to

be high inequality2) Prefer low

inequality3) Prefer if

inequality would be lower

No heterogeneous effects when people received information about their position

Scott H. Irwin

Consistent




Inconsistent





(Nair 2016)

USA H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought



DataResults

Discussion

Scott H. Irwin

Consistent




Inconsistent





(Nair 2016)

USA H1: Information about a person‘s place in the distribution will lower (raise) their utility if they are poorer (richer) than they thought


Effect driven by people:1) In top 40% of

distribution 2) Who would prefer

inequality to be lower


DataResults

Discussion

Scott H. Irwin

USA - H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility


Consistent


et al 2018)


Inconsistent


Angeletos, 2005)


2010)




DataResults

Discussion


Scott H. Irwin

USA - H2: Information about the level of overall inequality and social mobility in their country will lower people‘s utility


Consistent


et al 2018)


Inconsistent


Angeletos, 2005)


2010)




DataResults

Discussion


Effect driven by people:1) Perceive there is


to be higher

Scott H. Irwin

Need to re-examine existing economic theoriesMisperceptions of inequality distort people’s preferences for redistributionCorrecting these misperceptions will not necessary increase support for redistribution and can even reduce itEffect of information in the United States is substantially different to rest of world

Concluding Remarks



DataResults

Discussion


Scott H. Irwin

Another field experiment (in Australia) to conduct robust checks for these studiesConduct aggregate analysis (Bayesian Hieratical Modelling) to estimate common effectPackage results of this study into papers (egseparate paper of differences by political parties)

Next Steps



DataResults

Discussion


Scott H. Irwin Introduction to Fake Beamer 113Christopher Hoy Can information shape preferences for redistribution?

Scott H. Irwin

ADDITIONAL SLIDES


Scott H. Irwin

‘I believe this is the defining challenge of our time’Barrack Obama, Former US President

‘Excessive inequality is not good for sustainable growth’Christine Lagarde, Managing Director of IMF

‘Inequality is the root of social evil’ Pope Francis

Motivation

115Who Cares About Inequality?Christopher HoyChristopher Hoy Can information shape preferences for redistribution?

Scott H. Irwin

‘If poor people knew how rich, rich people are there would be riots on the streets’Chris Rock, American Comedian

Effect of Information (1)

116

Existing MisperceptionsEffect of information


Scott H. Irwin

Misperceptions related to a respondent’s position in the national distribution (H1) ADDITIONAL SLIDES



Scott H. Irwin

Existing Misperceptions (1)

119

Existing Misperceptions

Who Cares About Inequality?Christopher Hoy

Norton et al, 2014




Scott H. Irwin

Effect of Treatment B on people who thought there was high inequality


Scott H. Irwin

Effect of Treatment B on people who thought there was low inequality


Scott H. Irwin

Fundamentally, this is about the extent that people care about others wellbeing and are open to information changing their mindsThis effects a range of interactions in life like how people vote, their charitable giving and the way they view othersDisconnect between concern about inequality and support for redistribution

So what?

124

Existing MisperceptionsEffect of information

ResultsSo what?


Documents

Can information about inequality and social mobility ... · Can information change how people respond to inequality? Other Countries the effect is driven by people: 1) Prefer low