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Risk preferences and the demand for redistribution
Stockholm University, Faculty of Social Sciences, Department of Economics.
Stockholm University, Faculty of Social Sciences, Department of Economics.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

If individuals view redistributive policy as an insurance against future negative economic shocks, then the demand for redistribution increases in individual risk aversion. We provide a direct test of the correlation between the demand for redistribution and individual risk aversion in a customized survey and find that they are strongly and robustly positively correlated: more risk averse people demand more redistribution. We also replicate the results from previous literature and, on the one hand, find that the demand for redistribution is positively correlated with altruism, the belief that individual economic success is the result of luck rather than effort, a working-class parental background and downward mobility experience and expectations. On the other hand, preferences for redistribution are negatively correlated with income, a conservative political ideology and upward mobility experience and expectations. The magnitude of the correlation between risk aversion and the demand for redistribution is comparable to the magnitude of these previously identified, and here replicated, correlates.

National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:su:diva-122025OAI: oai:DiVA.org:su-122025DiVA: diva2:862199
Available from: 2015-10-20 Created: 2015-10-20 Last updated: 2015-10-22
In thesis
1. Prosocial Behavior and Redistributive Preferences
Open this publication in new window or tab >>Prosocial Behavior and Redistributive Preferences
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This Ph.D. thesis contains four independent essays. The essays are summarized as follows.

Essay I: Status quos and the prosociality of intuitive decision making

This study investigates how the prosociality of intuitive choices depends on the presence of a status quo. I present the results of a dictator game experiment with a non-student sample. The dictator game is a choice between a selfish option and a fair and efficient option, and has either no status quo, a selfish status quo or a fair status quo. Intuitive choices are elicited in two ways, by an exogenous variation in time pressure and by measuring response times. I find that time pressure decreases the share of fair choices in decisions without a status quo, but has no effect in the presence of a status quo. Fair and selfish choices have equal response times in a decision without a status quo, whereas the status quo option is always chosen faster, i.e. fast choices are fair under a fair status quo and selfish under a selfish status quo. This suggests that the decision context critically affects whether intuitive choices are prosocial or selfish.

Essay II: Risk preferences and the demand for redistribution

If individuals view redistributive policy as an insurance against future negative economic shocks, then the demand for redistribution increases in individual risk aversion. We provide a direct test of the correlation between the demand for redistribution and individual risk aversion in a customized survey and find that they are strongly and robustly positively correlated: more risk averse people demand more redistribution. We also replicate the results from previous literature and, on the one hand, find that the demand for redistribution is positively correlated with altruism, the belief that individual economic success is the result of luck rather than effort, a working-class parental background and downward mobility experience and expectations. On the other hand, preferences for redistribution are negatively correlated with income, a conservative political ideology and upward mobility experience and expectations. The magnitude of the correlation between risk aversion and the demand for redistribution is comparable to the magnitude of these previously identified, and here replicated, correlates. 

Essay III: Omission effects in trolley problems with economic outcomes

This paper tests how ethical views and hypothetical choices in a trolley problem with economic outcomes depend on whether an outcome is the result of an action or an omission. In a vignette experiment, subjects read about a spectator that harms one person in order to save five others from harm either by taking an action or by omission, whereas the outcomes are either death or loss of property. The results show that the distinction between harmful actions and harmful omissions is significantly smaller in the economic domain, suggesting that omission effects in trolley problems are domain-specific. A comparison of moral views about harmful actions across outcome domains shows that this difference is driven by subjects being more outcome-focused when property rather than lives are at stake. 

Essay IV: Is there an omission effect in prosocial behavior?

We investigate whether individuals are more prone to act selfishly if they can passively allow for an outcome to be implemented (omission) rather than having to make an active choice (commission). In most settings, active and passive choice alternatives differ in terms of factors such as the presence of a suggested option, costs of taking an action, and awareness. We isolate the omission effect from confounding factors in two experiments, and find no evidence that the distinction between active and passive choices has an independent effect on the propensity to implement selfish outcomes. This suggests that increased selfishness through omission, as observed in various economic choice situations, is driven by other factors than a preference for selfish omissions.

Place, publisher, year, edition, pages
Stockholm: Department of Economics, Stockholm University, 2015. 15 p.
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:su:diva-121353 (URN)978-91-7649-265-9 (ISBN)
Public defence
2015-11-27, De Geersalen, Geovetenskapens hus, Svante Arrhenius väg 14, Stockholm, 13:00 (English)
Opponent
Supervisors
Available from: 2015-11-05 Created: 2015-09-29 Last updated: 2015-11-05Bibliographically approved

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