French Favored Redistribution Derived From Surveys Adrien Fabre - PowerPoint PPT Presentation

Presentation of the Surveys Main Results Discussion Introduction References Appendices French Favored Redistribution Derived From Surveys Adrien Fabre Paris School of Economics — Université Paris 1 04/2017 Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Main Results Discussion Introduction References Appendices Overview Presentation of the Surveys 1 Main Results 2 Discussion 3 Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Main Results Discussion Introduction References Appendices In almost every country, a majority of people supports that it is “the government’s responsibility to reduce income differences” (ISSP 2009) In France: 60% are favorable (strongly or not) to “an increase of taxes in order to redistribute the surplus to the least fortunate” (PISJ 2009); 89% agree (strongly or not) that “differences between high and low incomes should be reduced” in their country Which reform do they want? What redistribution(s) would satisfy their desire for a reform while still obtaining a majority support? Few studies quantify the preferred distribution: Singhal (2008), Forsé & Parodi (2014) and Weinzierl (2013) Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Main Results Data Discussion Parameters Determining the Redistribution References Appendices Data Collection (and Cleansing) Two surveys in autumn 2016: 1000 respondents each Attrition rate around 10% Special care for phrasing and quality of answers Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Main Results Data Discussion Parameters Determining the Redistribution References Appendices Sources and Variables Data from Enquête sur les Revenus Socio-Fiscaux (INSEE 2012) Main variable used: individual disposable income : Non-contributive social benefits imputed to the least contributor(s) of the household / other incomes imputed to their respective entitled person Custom interactive reform Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Main Results Data Discussion Parameters Determining the Redistribution References Appendices Method Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Main Results Data Discussion Parameters Determining the Redistribution References Appendices Demogrant (€/month) Median (1st sample): 800€/month Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Main Results Data Discussion Parameters Determining the Redistribution References Appendices Maximal (monthly) income Median (1st sample): 100,000€/month Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Main Results Data Discussion Parameters Determining the Redistribution References Appendices Proportion to dis/advantage Median: 50% (to advantage) / 10% (to disadvantage) slider Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices 4 proposed reforms proposed reform demogrant average median distortionary median median algorithm demogrant demogrant Dis/adv Dis/adv distorsion No No No Yes method median average median close to params customized params median params demogrant 800 859 800 550 advantage 77 58 50 50 disadvantage 23 42 10 12 Gini (current: 0.29 0.25 0.24 0.25 0.43) Transfer-to-GDP 0.09 0.12 0.12 0.12 Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices Algorithm Demogrant: “median demogrant” Yes: 42% No: 38% Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices Algorithm Demogrant: “average” Yes: 39% No: 37% Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices Algorithm Dis/adv: “median” No: 26% Yes: 52% Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices Algorithm Dis/adv: “distortionary median” Yes: 46% No: 28% Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices Table: Rate of approval of different proposed redistribution (in %). 95% confidence intervals are reported inside square brackets. Proposed reform Demogrant median Average Median Distortionary median Personalized Number of respondents 488 509 505 492 1007 Yes 42 39 52 46 50 [37.9; 46.5] [35.1; 43.7] [47.8; 56,4] [41.1; 50.0] [46.4; 52.6] 38 37 26 28 28 No [34.1; 42.6] [33.0; 41.4] [22.5; 30.1] [23.7; 31.7] [25.6; 31.1] PNR 20 24 22 27 22 (People Not Responding) [16.4; 23.3] [20.1; 27.5] [18.4; 25.5] [23.2; 31.1] [19.8; 24.9] Yes, excluding PNR 52 51 67 62 64 [47.6; 57.3] [46.4; 56.4] [61.9; 71.0] [57.1; 67.2] [60.2; 66.9] Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices Approval of a reform (1) (2) (3) Constant 0.675 ∗∗∗ 0.508 ∗∗∗ (0.041) (0.036) − 0.045 ∗∗∗ Income (k€ per month) 0.091 (0.013) (0.075) − 0.078 ∗∗∗ − 0.087 ∗∗∗ Left - Right leaning (-2 to +2) (0.012) (0.014) − 0.125 ∗∗∗ Disadvantaged − 0.072 (0.031) (0.053) − 0.090 ∗∗∗ Misunderstanding of graphics 0.022 (0.024) (0.032) − 0.019 ∗ Wealth (0 to 6) − 0.016 (0.010) (0.014) 0.023 ∗∗∗ 0.017 ∗ Future wealth (0 to 6) (0.007) (0.009) Age (1 to 8) − 0.005 (0.010) Gender: female − 0.019 (0.032) Highest degree (0 to 6) 0.003 (0.009) Observations 1,146 1,658 1,048 R 2 0.064 0.032 0.501 ∗ p < 0.1; ∗∗ p < 0.05; ∗∗∗ p < 0.01 Note: Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices The approval rate of 55% separates advantaged and disadvantaged Table: Approval of a reform by (individual disposable) income level (in % and €/month.), excluding people not responding (PNR).The cells in bold-italic correspond to those supposed to be disadvantaged by the reform. Income (€/month) ≤ 1200 1201 to 1600 1601 to 2200 2201 to 3000 > 3000 PNR (any reform) 31 25 26 15 13 Approval (any reform) 75 64 58 56 38 median 79 71 61 73 53 distortionary median 76 66 67 63 35 demogrant median 69 63 58 49 26 average 75 56 48 42 35 Number of obs. (average) 66 66 86 68 92 Number of weighted obs. (average) 71 69 81 64 79 Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices Evaluated Distributions Demogrant median Median Actual Rawlsian optimal Utilitarian optimal Egalitarian taxation taxation Adrien Fabre French Favored Redistribution Derived From Surveys

Presentation of the Surveys Redistributions Derived From Surveys Main Results Majority Adhesions to Proposed Redistributions Discussion Socio-demographic Determinants and Other Correlates References Evaluations of Distributions: Triumph of Optimal Tax Theory Appendices Evaluations of the Distributions Adrien Fabre French Favored Redistribution Derived From Surveys