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Social sampling, self-anchoring and redistribution

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  • Schulz, Jan
  • Mayerhoffer, Daniel

Abstract

We examine the effect that agents anchor their perceptions of societal mean incomes on their own incomes. As we show analytically and verify by means of numerical simulation, this self-anchoring implies that even if the sampling of agents is unbiased and fully random, including their own income into their estimate of the average can lead to substantial misperceptions, especially, if the sampling ratio is small. Within a Meltzer–Richard framework, we then demonstrate that self-anchoring leads to a decrease in implemented redistribution.

Suggested Citation

  • Schulz, Jan & Mayerhoffer, Daniel, 2024. "Social sampling, self-anchoring and redistribution," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004269
    DOI: 10.1016/j.econlet.2024.111942
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    References listed on IDEAS

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    1. Moritz Kuhn & Moritz Schularick & Ulrike I. Steins, 2020. "Income and Wealth Inequality in America, 1949–2016," Journal of Political Economy, University of Chicago Press, vol. 128(9), pages 3469-3519.
    2. Spencer Bastani & Jacob Lundberg, 2017. "Political preferences for redistribution in Sweden," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(4), pages 345-367, December.
    3. Lopez-Velasco, Armando R., 2020. "Voting over redistribution in the Meltzer–Richard model under interdependent labor inputs," Economics Letters, Elsevier, vol. 192(C).
    4. Jan Schulz & Daniel M. Mayerhoffer & Anna Gebhard, 2022. "A Network-Based Explanation of Inequality Perceptions," Papers 2203.14254, arXiv.org, revised Apr 2022.
    5. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
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