Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289980 
Year of Publication: 
2022
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1385
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
Why do individuals' preferences for redistribution often diverge widely from their material self-interest? Using an original online survey experiment spanning eight countries and 12,000 respondents across Latin America, one of the most unequal regions in the world, we find significant evidence for an under-explored explanation: misconceptions regarding the distributional effects of current tax policy. Treated respondents who are informed that an increase in the value added tax (VAT) is regressive are significantly more likely to prefer policy reforms that make the tax more progressive. Treatment effects are driven by the large fraction of respondents who underestimate the regressivity of the VAT, even though their misperceptions are linked to fundamental views about the world. These respondents are disproportionately right-leaning and more likely to attribute success to individual effort than luck. Despite the deep-rooted nature of respondents'misperceptions, treatment effects are largest among individuals who hold these views of the world. These findings contribute both to understanding the political economy of redistribution and the potential for information interventions to shift support for fiscal adjustment policies protecting the most vulnerable.
Subjects: 
taxes
redistribution
survey experiment
JEL: 
D72
D90
H20
H30
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.