TY - JOUR
T1 - Reference points and redistributive preferences
T2 - Experimental evidence
AU - Charité, Jimmy
AU - Fisman, Raymond
AU - Kuziemko, Ilyana
AU - Zhang, Kewei
N1 - Funding Information:
☆ We thank Alberto Alesina, Angus Deaton, Stefano DellaVigna, Marc Fleurbaey, Larry Katz, Benjamin Lockwood, Nolan McCarty, David Moss, Howard Rudnick, Stefanie Stantcheva, Matt Weinzierl, and Leeat Yariv for helpful discussions, as well as seminar participants at the AEA meetings, Berkeley, Bocconi, UCSB, Chicago, Columbia, Harvard, LSE, NBER, Northwestern, Princeton, UPF, and Stockholm. Financial support from the Tobin Project is gratefully acknowledged. Adith Srinivasamurthy provided invaluable assistance with JavaScript programming and Dana Scott provided excellent research assistance.
Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2022/12
Y1 - 2022/12
N2 - 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.
AB - 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.
KW - Redistributive preferences
KW - Reference dependence
KW - Taxation
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U2 - 10.1016/j.jpubeco.2022.104761
DO - 10.1016/j.jpubeco.2022.104761
M3 - Article
AN - SCOPUS:85140926066
SN - 0047-2727
VL - 216
JO - Journal of Public Economics
JF - Journal of Public Economics
M1 - 104761
ER -