Research

We examine the attitudes of the wealthy towards government redistribution using a large and diverse sample of individuals from the top 5% of the income and wealth distribution in the U.S., as well as the remaining 95%. Three results stand out: (1) wealthy Americans have distinct fairness preferences, with a greater willingness to accept inequalities relative to the general public, (2) individuals who self-report having experienced upward social mobility and became first-generation wealthy are particularly accepting of inequality, while those born into wealth have fairness preferences similar to the general population; (3) the disparity in fairness preferences between the rich and the general public is predictive of greater opposition to redistribution among the wealthy, resulting in more conservative voting behavior. These findings provide new insights into the reasons behind the wealthy’s opposition to government redistribution.

We study Danish adult gambling behavior with an emphasis on discovering patterns relevant to public health forecasting and economic welfare assessment of policy. Methodological innovations include measurement of formative in addition to reflective constructs, estimation of prospective risk for developing gambling disorder rather than risk of being falsely negatively diagnosed, analysis with attention to sample weights and correction for sample selection bias, estimation of the impact of trigger questions on prevalence estimates and sample characteristics, and distinguishing between total and marginal effects of risk-indicating factors. The most significant novelty in our design is that nobody was excluded on the basis of their response to a ‘trigger’ or ‘gateway’ question about previous gambling history. Our sample consists of 8405 adult Danes. We administered the Focal Adult Gambling Screen to all subjects and estimate prospective risk for disordered gambling. We find that 87.6% of the population is indicated for no detectable risk, 5.4% is indicated for early risk, 1.7% is indicated for intermediate risk, 2.6% is indicated for advanced risk, and 2.6% is indicated for disordered gambling. Correcting for sample weights and controlling for sample selection has a significant effect on prevalence rates. Although these estimates of the ‘at risk’ fraction of the population are significantly higher than conventionally reported, we infer a significant decrease in overall prevalence rates of detectable risk with these corrections, since gambling behavior is positively correlated with the decision to participate in gambling surveys. We also find that imposing a threshold gambling history leads to underestimation of the prevalence of gambling problems.

In Deutschland leben die reichsten 10% der Bevölkerung durchschnittlich sieben Jahre länger als die ärmsten 10%. Diese soziale Ungleichheit in der Lebenserwartung ist in den vergangenen Jahren tendenziell noch angestiegen. Möchte die Politik etwas an diesem Umstand ändern, ist die Gunst der Wählerschaft eine notwendige Voraussetzung. Doch ist sich die Bevölkerung über das Ausmaß der sozialen Ungleichheit in der Lebenserwartung bewusst? Und inwiefern hängt die Unterstützung sozialpolitischer Maßnahmen von diesem Bewusstsein ab? Diese Fragen beantworten wir mit Hilfe eines Umfrageexperiments mit 6 000 Teilnehmenden. Die Ergebnisse zeigen, dass die Bevölkerung nur eine sehr diffuse Wahrnehmung sozialer Ungleichheit in der Lebenserwartung hat: 30% der Teilnehmenden unterschätzen die Ungleichheit, wohingegen 70% diese überschätzen. Im Durchschnitt überschätzt die deutsche Bevölkerung den Unterschied in der Lebenserwartung zwischen Arm und Reich um vier Jahre. Wenn man die Bevölkerung über die tatsächliche soziale Ungleichheit in der Lebenserwartung informiert, gleicht sich das Problembewusstsein von Über- und Unterschätzenden der Ungleichheit an. Allerdings finden wir keinen Einfluss auf die Politikpräferenzen. Die Zustimmung zu sozialpolitischen Maßnahmen, die eine höhere Lebenserwartung der Armen über die Gesundheitsversorgung, ökonomische Sicherheit, Lebens- und Arbeitsbedingungen sowie Bildung adressieren würden, ist hoch und unabhängig vom wahrgenommenen Ausmaß der sozialen Ungleichheit in der Lebenserwartung. 

Using survey experiments in the United States and Germany with 12,000 participants, we examine perceptions of life expectancy inequality between rich and poor people. The life expectancy of the poor is underestimated more than that of the rich, leading to exaggerated perceptions of inequality in both countries. Receiving accurate information narrows concerns about this inequality. However, the impact of information on policy demand is limited because support for policies addressing life expectancy for the poor is consistently high, regardless of varying perceptions of inequality. We conclude that there is strong and unconditional public support for health equity policies. 

Life cycle models of consumption and saving behavior associate higher discount rates with lower financial wealth and present bias with liquidity constraints. We test these associations and analyze whether discounting behavior in time preference experiments is correlated with wealth and liquidity. We combine choice data from a field experiment in Denmark with detailed administrative data on individual income and financial wealth and estimate exponential and quasi-hyperbolic discounting models. Our results reveal no evidence of present bias for either affluent or liquidity constrained subjects. However, subjects in the lowest wealth quartiles exhibit exponential discount rates that are nearly twice as high as those we estimate for subjects in the highest wealth quartiles.

The experimental literature to date suggests that individual discount rates are sensitive to assumptions regarding integration of income with background consumption and consumption smoothing, i.e., the spending period and pattern of monetary rewards in incentivized decision tasks. I analyze the sensitivity of individual discount rates elicited from choices in experiments and highlight important simulation results: If the utility function is exogenous, then discount rates are sensitive to assumptions regarding background consumption and consumption smoothing. However, if the utility function is elicited jointly with time preferences, then discount rates are robust to time-invariant background consumption and consumption smoothing. These results hold for various elicitation methods and utility specifications that are common in the experimental literature, they clarify seemingly contradictory conclusions from previous studies, and highlight the importance of joint elicitation of the utility function and discount rates.

This thesis consists of three independent chapters on the elicitation of individual discount rates and on the estimation of gambling prevalence in Denmark. The first chapter, “Discount Rate Sensitivity to Background Consumption and Consumption Smoothing,” studies the sensitivity of individual discount rates with respect to background consumption and consumption smoothing. I use simulated choice data from standard decision tasks in time preference experiments and show that individual discount rates are sensitive to assumptions with respect to background consumption and consumption smoothing if the utility function is non-linear and exogenous. However, if discount rates and the utility function are elicited jointly, discount rates are robust to assumptions on time-invariant background consumption and consumption smoothing. The analysis clarifies mixed conclusions from previous studies and indicates which elicitation methods provide robust estimates of individual discount rates.