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Perceived Relative Income and Preferences for Public Good Provision

Balietti, Anca ; Budjan, Angelika ; Eymess, Tillmann

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Guided by a theoretical framework, we study how perceived relative income affects preferences for public goods. In a randomized survey experiment, we inform respondents from India of their official income rank and elicit preferences for air quality, including actual contributions to environmental initiatives. Right-wing supporters withdraw contributions when perceived relative income increases. The effect coincides with diminished health concerns and lower intentions to utilize private protection measures against air pollution. In contrast, center-left supporters do not reduce contributions. A second survey experiment demonstrates the causality of the relationship using a novel treatment that exogenously shifts relative income perceptions.

Document type: Working paper
Series Name: Discussion Paper Series
Volume: 0729
Place of Publication: Heidelberg
Date Deposited: 27 Jun 2023 06:16
Date: 2023
Number of Pages: 78
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
DDC-classification: 330 Economics
Controlled Keywords: public goods, air pollution
Uncontrolled Keywords: perceived relative income, voluntary contributions
Series: Discussion Paper Series / University of Heidelberg, Department of Economics
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