Reference points and redistributive preferences: Experimental evidence

Jimmy Charité, Raymond Fisman, Ilyana Kuziemko, Kewei Zhang

Research output: Contribution to journalArticlepeer-review

Abstract

We explore whether individuals, when acting as social planners, respect others’ reference points. We allow subjects to redistribute unequal, unearned initial endowments between two anonymous recipients. Subjects redistribute twenty percent less when recipients know their initial endowments (and thus may have formed corresponding reference points) than when the recipients do not know their initial endowments, in which case we observe near-complete redistribution. The result holds for both within- and between-subject comparisons and is robust to a number of variants in design. The extensive margin response (redistributing zero versus any amount) drives the difference, further suggesting that respect for reference points drives the observed limited redistribution.

Original languageEnglish (US)
Article number104761
JournalJournal of Public Economics
Volume216
DOIs
StatePublished - Dec 2022

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Keywords

  • Redistributive preferences
  • Reference dependence
  • Taxation

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