A piece of coming-soon news. Dr Ilja Neustadt — Associate Professor, PhD in Economics (Universität Zürich), delivering lectures for the students of our School of Public Policy — will soon present a working paper "Willingness to Pay for Income Redistribution and Composition of Social Expenditure: Experimental Evidence from Russia".
Here's the abstract of this work. Especially for the readers of #ISSOnline.
In this study, we perform a discrete choice experiment and a survey with a sample of Russian citizens from several largest cities that is representative of Russian urban population.
The experimental design is based on random utility theory and a consideration that individual willingness to pay for income redistribution of a rational citizen is determined by multidimensional preferences and a taxpayer’s budget constraint; in particular, citizens care both about the total amount of income redistribution and its allocation to alternative uses.
An average respondent is shown to exhibit a positive value of marginal willingness to pay for redistribution and preferences for a reallocation of public expenditure in favour of health care and education to detriment of other uses such as old-age pension insurance and social benefits.
Relating estimated marginal willingness-to-pay values to respondents’ socioeconomic characteristics allows to test several hypotheses with regard to preference heterogeneity.
In particular, we test the Meltzer-Richard hypothesis and find its very limited empirical evidence.
By way of contrast, level of education is shown to be a significant determinant of demand for redistribution.
The paper concludes with an analysis of behavioural determinants and alternative motivations of income redistribution.
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