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Misperceptions of the Global Income Distribution and Preferences for Cross-National Redistribution in the United States


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Principal Investigator(s):

Gautam Nair
Yale University
Email: gautam.nair@yale.edu
Home page: http://politicalscience.yale.edu/people/gautam-nair

Sample size: 2078
Field period: 01/02/2015-07/28/2015

 

Abstract:

A recent political economy literature finds that individuals systematically misperceive their rank in their country’s distribution of income and wealth, with important implications for attitudes towards income inequality and redistributive policies. This proposal describes a novel survey experiment that evaluates how biased perceptions of the global income distribution shape stated and revealed preferences for international redistribution among individuals in the United States. Our research has the potential to make significant contributions to recent scholarship on the formation of subjective preferences, empirical research on the determinants of support for international redistribution, and cosmopolitan political theory

Hypotheses:

H1: Individuals in advanced industrial countries such as the United States systematically misperceive their position in the distribution of income. More specifically, individuals on average tend to underestimate their rank and overestimate the global median income.

H2: If H1 is true, then providing individuals with accurate information about their rank and the global median income will increase individuals’ support for foreign aid and other kinds of cross-national redistribution.

Experimental Manipulations:

Group 1: Control (probability 1/4)

Group 2: Salience (respondents are asked to estimate the global median income and their rank in the global income distribution) (probability 1/4)

Group 3: Information (respondents are asked to estimate the global median income and their rank in the global income distribution and then given accurate information) (probability 1/4)

Group 4: Salience Domestic (respondents are asked to estimate the US median income and their rank in the US income distribution) (probability 1/8)

Group 5: Information Domestic (respondents are asked to estimate the US median income and their rank in the US income distribution and then given accurate information) (probability 1/8)

Key Dependent Variables:

Attitudes towards foreign aid, US agricultural tariffs and subsidies, charitable giving to domestic and international charities (from an actual or hypothetical $20 bonus in a dictator game), and attitudes towards domestic redistribution.

Summary of Findings:

Preliminary findings:

While the median respondent is in the top decile of the world’s purchasing power adjusted income distribution, she places herself at the sixtieth percentile of the distribution and estimates the global median income at $20,000 per year.

The proportion of respondents supporting increases in US foreign economic assistance rises from 12% among control group respondents to 22% among participants randomly assigned information on relative international income. Similarly, the percentage supporting cuts in US trade protections for domestic agriculture rises from 43% to 50%. Giving to a charity identified as providing aid to recipients abroad increases by 55% on average.

The effects in the salience group are approximately half those observed in information group. Even after learning that they are substantially wealthier in relative terms than they had thought, many Americans remain skeptical of policies that would transfer income abroad, donate twice as much to domestic charities, and only evince a modestly greater interest in sending a petition to their senator calling for changes in US policies on trade and foreign economic assistance

There is no increase in average giving to a domestic charity or support for domestic redistribution. Reported past charitable giving and agreement with a statement that the rich have a responsibility to help the poor also do not increase. These results suggest "wealth effects", social desirability bias, and norm-priming are not the principal mechanisms.

Additional Information:

Working paper available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2709203

References

Gautam Nair. "Misperceptions of Relative Income and Preferences for International Redistribution in the United States." Paper presented at the Annual Meeting of the American Political Science Association, 2015.

 


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