Income Perception Errors Shape Tax Preferences: A New Experiment Reveals

Income DistributionSurvey ExperimentProgressive TaxationComparative Political EconomyPolitical Behavior PSR&M 1 Stata file 1 dataset Dataverse

Individuals often misjudge their position in the income distribution.

Data & Methods

This study uses survey data and an embedded experiment, informing participants about their true income rank.

Key Findings

People exhibit significant self-placement error regarding income levels.
Receiving accurate information notably alters preferences for progressive taxation:
Specifically among those identifying as poor;
Among those with a preconceived notion of being in the lower income bracket.

Why It Matters

This research challenges core assumptions about voter knowledge essential to models of redistribution.

It demonstrates that correcting widespread income misperceptions can reshape preferences for tax policy, an understudied aspect.

Income Perception, Information, and Progressive Taxation: Evidence from a Survey Experiment was authored by Alexander Kuo and JosÃ© FernÃ¡ndez-Albertos. It was published by Cambridge in PSR&M in 2018.