DONDENA Seminar - Morten Støstad

“The Consequences of Inequality: Beliefs and Redistributive Preferences”

SPEAKER: Morten Støstad (Norwegian School of Economics)

ABSTRACT:

What matters for individuals' preferences for redistribution? In this paper we show that consequentialist beliefs about inequality -- beliefs about how economic inequality changes the crime rate or the quality of democratic institutions, for example -- have a large causal impact on individuals' redistributive preferences. Using two representative surveys of a combined 6,731 U.S. citizens, we show that a majority of respondents believe that inequality leads to a wide range of negative societal outcomes. We establish a causal link from such beliefs to individuals' redistributive preferences by using exogenously provided video information treatments. With this and other methods we show that these ``inequality externality beliefs" affect redistributive preferences on the same order of magnitude as broad economic fairness views. These beliefs also have various unique properties when compared to other determinants for redistributive preferences. As such, we discuss whether a focus on inequality's consequences could shape a distinct conversation about redistribution.

BIO:

Morten Nyborg Støstad is a postdoctoral researcher at the FAIR Institute at the Norwegian School of Economics (NHH). He received his PhD in Economics from the Paris School of Economics in 2023. His research mainly focuses on the societal consequences of inequality, or the concept of inequality as an externality. He has also published academic papers in astronomy.

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