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Search for Individual (and Collective) Evaluation on a Status of Society as an Outcome of Public Policy: Normative Criteria and Perceived Facts About Equality and Economic Growth

This study explores how individuals' preference on redistribution policy can be explained. In doing this, we especially assume that such a preference should reflect the people's evaluation on a status of society which is an outcome of public policy. Usually in existing studies, redistributive preference is measured by a response which corresponds to some expression in a natural language, e.g. "agree" with the statement indicating the government should redistribute more. In contrast, this study utilizes the data produced by a set of questionnaire items, where respondents answered concrete amount of money the government should take from, and give to, each household in a fictional society, looking at the whole picture of the society. At the same time, this set of items asked respondents how much they thought economic growth in the society would be enhanced or harmed by the policy they answered. We tap the responses in 2011 and 2012 of the dataset from JHPS, a Japan's nationwide panel survey. Our analyses using this dataset show the following results. First, the better-educated people tend to prefer stronger redistribution, reversely to most existing studies. Second, the empirical analysis based on the theoretical model we develop shows that, while education affects the individual's normative criterion to evaluate the society, it also affects the perceived fact that the individual conceives about the external effect of redistribution on economic growth, and the perceived fact in turn affects her/his preferred level of redistribution, and so we can interpret the better-educated tend to prefer stronger redistribution because they think it enhances growth. With these results we argue for the relevance of measuring preference concretely and also for the possibility that conflicts over public policy can be moderated to some degree when people share a common perceived fact, or common "knowledge." In the appendix we briefly discuss possible future research where we might determine collective preference order from the results obtained in the procedure stated above.