Would Australians be more supportive of redistribution if they knew what level of inequality existed?

Presented by ANU College of Asia & the Pacific

Previous studies have shown that Australians tend to dramatically underestimate the level of national inequality and tend to believe they are around the middle of the income distribution regardless of whether they are rich or poor.
We test whether people would be more supportive of redistributive policies (such as taxes on high income earners and welfare programs) if they knew the level of inequality in Australia and their actual position in the income distribution. Specifically, we conducted an online randomised control trial as part of a nationally representative survey of around 3500 Australians through the market research company IPSOS.

We show that Coalition voters who were informed they were relatively poorer than they thought became more supportive of urgent action by the government to reduce inequality and were more in favour of increases in taxes on the richest Australians. In contrast, Labour voters who were informed they were richer than they thought became less concerned about inequality and less supportive of increases in the minimum wage.

Chris Hoy is studying his PhD in Economics and has over 10 years' experience in the international development sector. He holds a Masters of International and Development Economics from Yale University. Before starting his PhD, Chris was a researcher with the Overseas Development Institute (ODI) as well as having worked as an economist for UNICEF Uganda, the Australian Aid Program and the Australian Treasury. He has produced over 15 research papers on a range of topics related to poverty and inequality.

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