Income inequality, redistribution and the position of the decisive voter

Groot, Loek; Linde, Daan van der

doi:10.1007/s10888-016-9333-7

Cited by 3 publications

(1 citation statement)

References 27 publications

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“…To simulate the income distribution, the same methodology is used as in Groot and Van der Linde (2016). It starts from the assumption that income in a country is lognormally distributed, characterized by a long tail on the right side of the distribution, which is often seen in the real world.…”

Section: Datamentioning

confidence: 99%

Welfare effects of energy subsidy reform in developing countries

Groot

Oostveen

2019

Review Development Economics

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We analyze the potential welfare effect of energy subsidy reforms. The income distributions of eleven developing countries from different geographical regions are simulated using the assumption that income is lognormally distributed. We use the concept of the compensating variation to measure how much compensation is required to compensate consumers for a price increase in formerly subsidized goods. The behavior of consumers is modeled by a standard Cobb–Douglas and a quasilinear utility function. In the Cobb–Douglas case, a fixed fraction of income is spent on the subsidized good, which does not change after a price increase. With quasilinear preferences, the optimal amount of the subsidized good does not vary with income, but does change as prices change. We show theoretically and empirically that the required compensating variation can be set below the saved expenditures on subsidies, so a budget neutral reform can have a positive effect on social welfare.

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Section: Datamentioning

confidence: 99%

Welfare effects of energy subsidy reform in developing countries

Groot

Oostveen

2019

Review Development Economics

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Fiscal illusion and progressive taxation with retrospective voting

Abatemarco

Dell’Anno

2020

Economic and Political Studies

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W e c o n s i d e r t h e t a x p r o g r e s s i v i t y d e c i s i o n o f a r e n t-m a x i m i z i n g government when voters' perceptions of the tax price of public goods are biased by cognitive anomalies (i.e., fiscal illusion), and the electorate opts for re-appointing or for dismissing the incumbent according to a retrospective voting logic. Given electoral and constitutional constraints, we show that the design of the tax system can be sensibly affected by fiscal illusion within the population of voters. Specifically, we find that (i) the tax system is more (less) progressive when taxes and public expenditures are perceived less (more), and (ii) an increase in the median voter's income may positively or negatively affect tax progressivity depending on the nature (pessimistic or optimistic) of fiscal illusion. The impact of fiscal illusion on tax progressivity is validated by econometric analysis.

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New Perspectives on May’s Theorem and the Median Voter Theorem

Fast

2022

FMIR

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The paper defines and analyzes May’s Theorem and the Median Voter Theorem from the Public Policy and Public Choice literature and seeks to compare and contrast the use of both. Through the use of theoretical and applied examples, the paper demonstrates how collective decision-making research has evolved to better inform public policy. Building on Black’s (1948) notion that it is the voter in the ideological middle that decides elections, Holcombe (1980) provides an empirical analysis of this theory, Scervini (2012) attempts to show that the middle class (median) voter decides taxation and redistribution policy, Rowley (1984) takes a New Institutional approach to analyzing voters’ preferences, Groot and van der Linde (2016) conducts a cross-country analysis to see if the Median Voter Theorem holds true across time and cultures, Carrillo and Castanheira (2008) show that voters change their behavior from the preference of the median voter as the press reveals new information about the quality of candidates which alters voters’ perceptions, and Congleton (2003) asserts there may not always be a median voter with examples. Building on May’s Theorem that voting is an aggregation of voters’ preferences, Hotelling (1929), Black (1948), Maskin (1999), Duggan (2015), and Brady and Chambers (2017) expand on social preference theory showing that Arrow (1951) and May (1952)’s work needed to be updated to include verifiable, empirical tests and further refinements. The paper shows how public policy analysis and group decision making theory and application have evolved over the past 75 years and shines some light on areas for future research and analysis. These findings are important because it will help make candidates and policy proposals more palatable to voters in the ideological middle (median voter) who, as the studies show, often determines the winner. The paper will be of interest to anyone involved in public policy and group decision making processes.

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Income inequality, redistribution and the position of the decisive voter

Cited by 3 publications

References 27 publications

Welfare effects of energy subsidy reform in developing countries

Welfare effects of energy subsidy reform in developing countries

Fiscal illusion and progressive taxation with retrospective voting

New Perspectives on May’s Theorem and the Median Voter Theorem

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