The Role of Social Interactions in Preferences for Redistribution

Abstract

This paper investigates the role of social influences in preferences for redistribution using data from the General Social Survey. We employ social interaction models with a socioeconomic network structure and intertemporal feedbacks during the impressionable years. We find substantial evidence of both lagged endogenous and contextual effects that imply that the redistributive preferences are intertemporally dependent. Interestingly, controlling for individual income, the contextual effect of income is negative and strongly significant . Our results highlight the key role of fathers' education in the structure of the social network. We interpret our findings as suggestive evidence that social identity can explain attitudes towards redistribution. We also uncover evidence of threshold effects in preferences for redistribution that are consistent with the predictions of theoretical models that exhibit multiple equilibria. Finally, we show that our results extend to a range of other attitudes and beliefs, including politics, religion, and ethics.