Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 18/2020: Does Wealth Reduce Support for Redistribution? Evidence from an Ethiopian Housing Lottery

Asbjørn G. Andersen, Simon Franklin, Andreas Kotsadam, Vincent Somville (), Espen Villanger and Tigabu Getahun
Additional contact information
Asbjørn G. Andersen: Ragnar Frisch Centre for Economic Research
Simon Franklin: Queen Mary University London
Andreas Kotsadam: Ragnar Frisch Centre for Economic Research
Vincent Somville: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Espen Villanger: Chr. Michelsen Institute
Tigabu Getahun: EDRI

Abstract: We provide causal evidence of how an increase in wealth affects support for redistribution and beliefs about the causes of poverty. Exploiting the variation in wealth created by an Ethiopian housing lottery, we show that general attitudes toward redistribution and inequality acceptance are relatively insensitive to economic circumstances although winners are less favorable of taxing homeowners. Further, we find evidence of endogenous beliefs: relative to losers, the wealthier winners are more likely to attribute poverty to character traits and less likely to emphasize the role of luck. We interpret this as evidence of a self-serving bias.

Keywords: Inequality; Poverty

JEL-codes: I30

81 pages, September 16, 2020

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