Thread by @atanaspekanov

If you are interested in the topic of public perceptions & beliefs, views towards redistribution & economic policy and populism, here is a long thread inspired by some exciting recent research by @S_Stantcheva (as presented at #eubef19) and by Guido Tabellini in Milano. 1/22

The message of @S_Stantcheva superb TED Talk: researchers should “listen” to people & gather information about their perceptions & views – using rigorous large online surveys, that are well-designed & targeted - that can help devise optimal policies 2/22

Our perceptions determine our votes for different policies. This is relevant to ensure people dont fall for easy solutions. In a paper last year e.g., @S_Stantcheva, Alesina & A Miano show how striking & widespread misperceptions about migration are. 3/22
voxeu.org/article/misper…

Using large surveys in 6 countries, the authors ask detailed questions about how citizens perceive immigrants (e.g. how many they thought there are, where they come from & their econ stuation). The authors find discussions are often not based on facts, but on stereotypes. 4/22

In 5 of the 6 countries, the average native believed that there are between 2 and 3 times as many immigrants as in reality. For instance, in the US legal immigrants are about 10% of population, but US respondents thought it was 30% (Similarly in DE, FR, IT and the UK) 5/22

Natives also got the origins of immigrants wrong - overestimating the shares of immigrants from 'problematic' regions. Immigrants were viewed as poorer, less educated, and more likely to be unemployed than is the case. 6/22

Natives also believed immigrants relied heavily on the welfare state. Respondents who personally knew immigrant had less biased perceptions. Part of the reason support for the welfare system is fraying is bcause people think it mostly benefits immigrants. This is inaccurate. 7/22

These skewed perceptions may lead to the view immigrants are a burden on the country public finances and disproportionately benefit from redistribution. Respondents who perceived a larger share of the poor were immigrants supported less redistribution. 8/22

Even making people think about immigrants before asking policy questions, led people to support less progressive, less redistributive policies. Anti-redistribution politicians can thus, even if not antimigration, focus on immigration to generate backlash agnst redistribution 9/22

Surveys can deliver other important info about misperceptions – e.g. what people know about themselves. People are often wrong about their rank in society. A recent paper e.g. shows how the rich overestimate how wealthy everyone else is – they don’t how poor the poor are 10/22

And vice versa – the poor think everyone else is poorer than they actually are – they don’t know how rich the rich are. See this awesome graph by @matschnetzer – where people think they are in the distribution vs reality, as provided by Austrian data 11/22

https://twitter.com/matschnetzer/status/1091679602265780225

@S_Stantcheva also talked about how people are wrong abt taxation. People underestimate the level at which top income tax kicks in - top tax rates affect much less people in reality. Simlarly, people think US estate tax is paid by 40% of the population, while its just 0.7 % 12/22

Overall, there is great value in using surveys for researchers to devise data driven policies because if we don’t listen - others will, that only pretend to present solutions. Economic policy affects our lives, but people often support policies without understanding them. 13/22

Guido Tabellini spoke on related topic at the CeFes conf in Milano in June – “Identity, beliefs & political conflict”. He explores why political systems witnessed large changes in beliefs & identities, in reaction to economic shocks – and how new political conflicts emerged 14/22

There is high polarization in voters beliefs on many issues today – the correlation is high inside political groups, with high mistrust towards opposing views. These are global phenomena – with those hit by shocks more probable to vote for populists 15/22
voxeu.org/article/identi…

But while in the past economically insecure voters voted left, now they vote right. Beliefs are shaped by social/political identities - one identifies with a social & political group. Economic & social shocks enhance similarities within groups & differences between them 16/22

Identification with a group amplifies polarization but only in some dimension. Workers identified with their class – against capital – but trade shocks led to an identifiction against trade/immigration – workers abandoned the old identity (so less demand for redistribution) 17/22

Social psychology confirms the link between identity & beliefs. According to the ‘social identity perspective’, individuals identify with social groups of similar people to structure & simplify the social world. These identities amplify political effects of econ changes 18/22

So polarisation increased along new dimension (cultural) & decreased along another dimension (class). Globalisation clustered indiv interests against foreign competition/immigration relative to traditional rich-poor divide - new division emerged - globalists vs nationalists 19/22

Poor voters exposed to costs of immigration/globalisation de-identify with their class and identify with the national group. They might benefit from greater redistribution, but they dont demand it bc they now identify with a group more heterogeneous across income classes. 20/22

Overall, this literature is extremely interesting and can give us many insights. It reminded me also about a superb thread by @Noahpinion from last year on facts regarding the immigration debate, with a lot of graphs and data. 21/22

https://twitter.com/Noahpinion/status/955624504247529472

One thing missing is the supply side – how political persuasion & social media intensify misperceptions about the world. The authors point that its to be developed. And it is crucial, as misperceptions are not in any way exogenous, but are determined by current narratives. 22/22