Trade-offs between redistribution and environmental protection: the role of information, ideology, and self-interest

Abstract

Reducing economic inequality and combatting climate change are two strongly supported policy goals, but they will require significant public investments. In times of limited fiscal resources, governments struggle to raise additional revenues needed to finance both, making trade-offs between generally supported policy goals likely. But how do citizens decide if they have to choose between goals they support in principle, such as spending on efforts to reduce inequality and channeling resources toward initiatives to protect the environment? We discuss three major factors that help explain this choiceinformation, self-interest, and ideological orientation. Our experimental study shows that information is not a significant determinant of such choices, and that ideology is only important as long as there are no conflicting goals. Once citizens have to decide between redistribution and environmental protection, myopic self-interest trumps all other theoretically relevant variables mentioned in the literature.

Learning about inequality and demand for redistribution

“…The unweighted averages are larger in the European countries and in the "other countries" group, although they seem to be driven by less precise estimates in some specific studies, as both the precision-weighted and the RE averages are smaller. Nevertheless, re-estimating the model by omitting one study out at a time, the average effect remains quite similar, spanning from 0.064, when removing Hubers (2018 [16]), to 0.079, when removing Alesina, Stantcheva and Teso (2018 [10]).…”

“…Results for the 𝛽𝛽 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 ′ are nevertheless in line with those shown in Table 4.1. 10…”

“…Finally, purely quantitative answers also seem to be associated with a stronger effect, although the opposite holds once we include in the sample fake-info interventions. 10 An alternative would have been to reweight each observations by the inverse of the number of outcomes reported in intervention j. This is the method used by Havránek (2015 [54]).…”

OECD Papers on Well-being and Inequalities

“…In order to perform the meta-analysis, for each dimension, a single outcome was needed to account for multiple testing. In this respect, we follow Alesina, Stantcheva and Teso (2018 [10]) (who themselves follow Kling, Liebman and Katz (2007 [13])) and focus on z-score indices that sum up multiple outcomes relative to the same dimension. In doing so, each outcome is standardised using the mean and standard deviation of the control group, and then all the outcomes are summed up with equal weights.…”

“…Gimpelson and Treisman (2018[9]) argue in favour of this last interpretation, showing that people's perceptions of inequality are widely inconsistent with the reality. Alesina, Stantcheva and Teso (2018 [10]) show that US residents are on average over-optimistic with regard to social mobility, while Europeans tend to be more pessimistic, and that the difference at least partially explains international differences in preferences for redistribution.…”