[Seminaire CREM] Beliefs in Merit, Trickle-Down Economics, and Preferences for Redistribution: An Experiment with the Top and Bottom 20%

We conduct an online survey experiment in the US to study the impact of people's beliefs in individual merit and trickle-down economics on their preferences for redistribution. Participants (N = 1800) selected from the top and bottom quintiles of the income distribution, referred to as spectators, decide how much money to redistribute between two individuals, referred to as stakeholders. In all cases, one stakeholder is an entrepreneur earning more than $100,000 in real life who performs a task for us for which he is assigned $50. The other stakeholder earns less than $10,000, does not perform any task and is assigned $1. We employ conjoint analysis to manipulate the stakeholders’ real-life characteristics and highlight their effort, as measured by the number of hours worked per day. Moreover, we highlight the high-income stakeholder’s talent in founding a new firm and his ability to benefit the economy by employing people in his firm and by donating money to charity. We find that the effort of the low-income stakeholder has the greatest impact on spectators’ redistributive choices, followed by the effort and talent of the high-income stakeholder. Furthermore, we find that the trickle-down component has an effect only on the redistributive choices of low-income spectators when it is framed in terms of donations to charity.