NBER Working Papers by Michael I. Norton

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Working Papers

March 2013How Elastic Are Preferences for Redistribution? Evidence from Randomized Survey Experiments
with Ilyana Kuziemko, Emmanuel Saez, Stefanie Stantcheva: w18865
We develop online survey experiments to analyze how information about inequality and taxes affects preferences for redistribution. Approximately 4,000 respondents were randomized into treatments providing interactive, customized information on U.S. income inequality, the link between top income tax rates and economic growth, and the estate tax. An additional 6,000 respondents were randomized into follow-up treatments to explore mechanisms underlying the initial results. The treatment has very large effects on whether respondents view inequality as a problem. By contrast, it only slightly moves policy preferences (e.g., top income tax rates and transfer programs). An exception is the estate tax—informing respondents of the small share of decedents who pay it more than doubles support for it...
July 2011"Last-place Aversion": Evidence and Redistributive Implications
with Ilyana Kuziemko, Ryan W. Buell, Taly Reich: w17234
Why do low-income individuals often oppose redistribution? We hypothesize that an aversion to being in "last place" undercuts support for redistribution, with low-income individuals punishing those slightly below themselves to keep someone "beneath" them. In laboratory experiments, we find support for "last-place aversion" in the contexts of risk aversion and redistributive preferences. Participants choose gambles with the potential to move them out of last place that they reject when randomly placed in other parts of the distribution. Similarly, in money- transfer games, those randomly placed in second-to-last place are the least likely to costlessly give money to the player one rank below. Last-place aversion predicts that those earning just above the minimum wage will be most likely to ...
September 2010Prosocial Spending and Well-Being: Cross-Cultural Evidence for a Psychological Universal
with Lara B. Aknin, Christopher P. Barrington-Leigh, Elizabeth W. Dunn, John F. Helliwell, Robert Biswas-Diener, Imelda Kemeza, Paul Nyende, Claire E. Ashton-James: w16415
This research provides the first support for a possible psychological universal: human beings around the world derive emotional benefits from using their financial resources to help others (prosocial spending). Analyzing survey data from 136 countries, we show that prosocial spending is consistently associated with greater happiness. To test for causality, we conduct experiments within two very different countries (Canada and Uganda) and show that spending money on others has a consistent, causal impact on happiness. In contrast to traditional economic thought—which places self-interest as the guiding principle of human motivation—our findings suggest that the reward experienced from helping others may be deeply ingrained in human nature, emerging in diverse cultural and economic contexts.

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