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Meltzer-Richard and social mobility hypothesis: revisiting the income-redistribution nexus using German choice data

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  • Pfarr, Christian

Abstract

Whereas the supply of redistribution is relatively easy to measure, the determinants of the demand for redistribution are controversially discussed in international literature. Economic theory typically models redistribution as the result of a voting mechanism; this is only inadequately reflected by the existing empirical studies. In general, these studies use survey data and are therefore not able to predict individuals’ decision making under the restriction of a budget constraint. This study aims at eliciting preferences for redistribution in Germany with the help of a Discrete Choice Experiment (DCE), based on a representative sample of 1,538 individuals. A DCE solves the aforementioned problems by forcing individuals to overcome trade-offs. The results show a strong preference for redistribution that overshoots the current level. Considering socio-demographic characteristics, the results contradict the Meltzer-Richard-Model and the POUM hypothesis, while Piketty’s learning model is strongly supported by the data.

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  • Pfarr, Christian, 2012. "Meltzer-Richard and social mobility hypothesis: revisiting the income-redistribution nexus using German choice data," MPRA Paper 43325, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:43325
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    Cited by:

    1. Pfarr, Christian & Schmid, Andreas & Ulrich, Volker, 2013. "You can't always get what you want - East and West Germans' attitudes and preferences regarding the welfare state," MPRA Paper 47240, University Library of Munich, Germany.
    2. Gwangeun Choi, 2021. "Individuals’ socioeconomic position, inequality perceptions, and redistributive preferences in OECD countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(2), pages 239-264, June.

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    More about this item

    Keywords

    redistributive preferences; social mobility; median voter;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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