Research

Abstract. This paper examines how perceptions of social mobility affect distributional preferences. We conduct a randomized information intervention in a large and heterogeneous sample of Germans to manipulate beliefs about social mobility. While the information treatment renders perceptions significantly more pessimistic, it changes neither revealed distributional preferences nor support for redistribution or education spending. The large sample size allows us to rule out economically meaningful treatment effects. One reason for this result seems to be that respondents do not link low mobility rates to the role of luck and inequality of opportunity. 

Abstract. This paper studies the ability of markets to alleviate taste-based discrimination in a laboratory experiment. We find that markets significantly reduce discrimination relative to individual choice situations with the same payoff structure and the same social group membership of the trading partner. We identify three main mechanisms behind this effect. First, the price of prejudice matters in both situations, but significantly more so in the market. Second, markets reduce identification with one's social group. Third, markets diminish egalitarian preferences. Passive subjects correctly anticipate the main effect. We confirm the main treatment effect in an online experiment with natural groups. 

Abstract. We conduct a representative survey experiment in Germany to understand why people support inefficient policies. In particular, we measure beliefs about and preferences for rent control - a policy that is widely regarded as harmful by experts. To tease out causal mechanisms, we provide randomly selected sub-sets of participants with empirical estimates about the effects of rent control on rent prices and housing supply and with information about the consensus among economists against rent control. We find that people update their beliefs and that this leads to lower demand for rent control. Left-wingers update their beliefs more strongly, which reduces the ideological gap in support for rent control by about one quarter. Providing information about economists' rejection of this policy leads to the largest reduction in support. However, the main drivers of support for rent control are fairness considerations and profit motives. Our study also highlights the importance of trust since treatment effects are consistently larger among those who indicate trust in the scientific information provided to them.  

Abstract. This paper studies ethnic discrimination.  We send out more than 25,000 e-mail inquiries to private businesses and public institutions  in Austria randomizing the name of the sender as either local or foreign. We document several empirical facts. First, discrimination is large, widespread and exists in virtually all branches and institutions. Second, discrimination is lower in the public than in the private sector. Third, we find evidence for both statistical and taste-based discrimination. Fourth, economic, political and socio-demographic variables do not explain discrimination well. Fifth, exploiting the quasi-random allocation of refugees during the 2015/16 crisis, we find no evidence that inter-group contact reduces discrimination. 

Abstract. Are individuals of higher socio-economic status less ethical than those of lower status? Highly popularized research findings claim that this is the case. This paper provides evidence against this claim, based on data from two large survey experiments with more than 11,000 participants. We prime social status in two heterogeneous samples of the German population and then elicit ethical behavior in an incentivized experimental task. Thus, our data allows us to study both correlation (using demographic data) and causality (using the priming). Our study rejects the claim that higher social status individuals are less ethical on both accounts. 

Abstract. We use a large and heterogeneous sample of the Danish population to investigate the importance of distributional preferences for behavior in a public good game and a trust game. We find robust evidence for the significant explanatory power of distributional preferences. In fact, compared to twenty-one covariates, distributional preferences turn out to be the single most important predictor of behavior. Specifically, subjects who reveal benevolence in the domain of advantageous inequality contribute more to the public good and are more likely to pick the trustworthy action in the trust game than other subjects. Since the experiments were spread out more than one year, our results suggest that there is a component of distributional preferences that is stable across games and over time. At the same time, we find that behavior in the standard dictator game is uncorrelated to behavior in all other games.  

Abstract. We elicit distributional fairness ideals of impartial spectators using an incentivized experiment in a large and heterogeneous sample of the German population. We document several empirical facts: i) egalitarianism is the predominant ideal; ii) females are more egalitarian than men; iii) men are relatively more efficiency minded; iv) left-leaning voters are more likely to be egalitarians, whereas right-leaning voters are more likely to be efficiency-minded; and v) young and high-educated participants hold different fairness ideals than the rest of the population. Moreover, we show that fairness ideals predict preferences for redistribution and intervention by the government, as well as actual charitable giving, even after controlling for a range of covariates. This paper thus contributes to our understanding of the underpinnings of voting behavior and ideological preferences and to the literature that links laboratory measures and field behavior. 

Abstract. This paper investigates in a large and heterogeneous sample the relationship between social preferences and political attitudes. Social preferences relate to political attitudes in a particular way: Selfish subjects are the extremists on the one side of the political spectrum – they are more likely to vote for a right-wing party, less inclined to favor redistribution, less likely to hold favorable views towards immigration and more likely to consider themselves right-wing than all other types. Inequality-averse, altruistic and maximin subjects, all characterized by benevolence in the domain of advantageous inequality, sit at the opposite end of the spectrum. Overall, our evidence indicates that political outcomes in various domains such as taxation, social security, the pension system or immigration cannot be fully understood without taking distributional preferences into account. 

Abstract. The increasing diversity of societies raises questions about the consequences for redistributive preferences. This paper assesses the impact of social identity on distributional preferences in a modified dictator game. I estimate individual-level utility functions with two parameters that govern the trade-offs between equity and efficiency and giving to self and to other. Subjects on average put less weight on income of the out-group. The out-group treatment also changes the distribution of equity-efficiency concerns. However, the experiment also uncovers a large individual heterogeneity of preferences. An analysis of GARP violations reveals that choices in both treatments overwhelmingly stem from well-behaved, yet systematically different underlying utility functions. Hence, the evidence presented here suggests that the rational choice approach is a useful tool for understanding the effect of social identity on preferences.  

Abstract. Fostering the emergence of a “European identity” was one of the declared goals of the euro adoption. Now, years after the physical introduction of the common currency, we investigate whether there has been an effect on a shared European identity. We use two different datasets in order to assess the impact of the euro adoption on the fostering of a self-declared “European Identity”. We find that the effect of the euro is statistically insignificant. We interpret this result as suggesting that the euro did not have the desired positive effect on feelings of European identity. This result holds important implications for European policy makers. It also sheds new light on the formation of social identities. 

Abstract. We present substantial evidence for the existence of a bias in the distribution of births of leading US politicians in favour of those who were the eldest in their cohort at school. This result adds to the research on the long‐term effects of relative age among peers at school. We discuss parametric and non‐parametric tests to identify this effect, and we show that it is not driven by measurement error, redshirting or a sorting effect of highly educated parents. The magnitude of the effect that we estimate is larger than what other studies on ‘relative age effects’ have found for broader populations but is in general consistent with research that looks at professional sportsmen. We also find that relative age does not seem to correlate with the quality of elected politicians. 

Abstract. This paper develops a method to estimate information rents – the difference between the actual compensation and the true willingness to accept – of losers of a reform who receive a monetary compensation. Our method explicitly accounts for survey respondents' reluctance to reveal a willingness to accept which is smaller than the actual compensation. We apply our approach to the case of the 2005 European agricultural reform using uniquely gathered survey data from farmers in Lower Saxony, Germany. We find empirical indications for strategic misreporting. Correcting for these effects with a structural model, we find that information rents are in the order of up to 14% of total compensation paid. Moreover, we show that the reform could not have been implemented distinctly cheaper by conditioning compensation schemes on observable factors. 

Abstract. We exploit a voting reform in France to estimate the causal effect of exit poll information on turnout and bandwagon voting. Before the change in legislation, individuals in some French overseas territories voted after the election result had already been made public via exit poll information from mainland France. We estimate that knowing the exit poll information decreases voter turnout by about 11 percentage points. Our study is the first clean empirical design outside of the laboratory to demonstrate the effect of such knowledge on voter turnout. Furthermore, we find that exit poll information significantly increases bandwagon voting; that is, voters who choose to turn out are more likely to vote for the expected winner. 

Abstract. Although tactical voting attracts a great deal of attention, it is very hard to measure as it requires knowledge of both individuals’ voting choices as well as their unobserved preferences. In this article, we present a simple empirical strategy to nonparametrically identify tactical voting patterns directly from balloting results. This approach allows us to study the magnitude and direction of strategic voting as well as to verify which information voters and parties take into account to determine marginal constituencies. We show that tactical voting played a significant role in the 2010 election, mainly for Liberal–Democratic voters supporting Labour. Moreover, our results suggest that voters seem to form their expectations based on a national swing in vote shares rather than newspaper guides published in the main media outlets or previous election outcomes. We also present some evidence that suggests that campaign spending is not driving tactical voting. 

Abstract. Algan and Cahuc (2010) argue that “inherited trust” is a key factor in explaining growth rates across countries. They derive a measure of inherited trust by linking respondents’ “home countries: in the United States General Social Survey (1972-2004) and the 2000 wave of the World Values Survey. Algan and Cahuc then estimate trust levels for people born before 1910 (inherited trust in 1935) and afterwards (inherited trust in 2000). They show a strong link between economic growth rates and inherited trust. We do not challenge this result, but we do argue that: (1) The 2000 World Values Survey has many anomalous results; (2) the estimates for inherited trust in 1935 are mostly based upon tiny samples for most ethnic heritage groups in the General Social Survey; and (3) Algan and Cahuc’s findings are based upon two-tailed rather than one-tailed tests. We reestimate their model using the more reliable waves of the World Values Survey and find much weaker relationships between inherited trust in 1935 and trust in the home country. We also suggest caution in the overall measure of inherited trust in 1935.