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Social Indicators Research

Erschienen in:

17.10.2017

Relative Deprivation, Satisfying Rationality, and Support for Redistribution

verfasst von: JaeYoul Shin

Erschienen in: Social Indicators Research | Ausgabe 1/2018

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Abstract

Why do individuals support redistribution? Many studies have investigated the factors that influence support for redistribution; however, none have confirmed the role of income satisfaction. The aim of this study is to explore the role of income satisfaction in its support of the mechanism for redistribution. In this study, I suggest relative deprivation theory and the concept of satisfying rationality , as both give income satisfaction a theoretical position. Based on this framework, I argue that income satisfaction could be an indicator of relative deprivation and is understood as the basis of rational action. Specifically, I suggest the mechanism of relative deprivation that a feeling of unfairness weakens income satisfaction, and deterioration in income satisfaction leads individuals to support redistribution. To support this argument, I conduct multilevel path analysis using World Value Survey 6 waves focusing on the OECD countries. I first examine the direct effect of income satisfaction on support for redistribution and find a statistical association between income satisfaction and support for redistribution. Then, I check the relationship between income satisfaction and feeling of unfairness to validate income satisfaction as an indicator of relative deprivation. These findings imply that scholars need to pay more attention to the substantial role of individuals’ subjective reaction to the objective economic conditions.

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Moreover, some researchers prematurely conclude that beliefs can distort the optimal equilibrium (Di Tella and Dubra 2013) or that being correctly informed can adjust individuals’ problematic choices (Karadja et al. 2017).

Karl Marx and George Simmel suggest a primitive form of relative deprivation.

In Yitzhaki’s index, individuals know the exact income distribution and systemically compare it with others. As a result, without the group divisions, the Yitzhaki index is the same as the Gini index. In other words, this formula postulates that individuals know others’ information perfectly and calculate without error.

D’ambrosio and Frick (2007) document that objective measures of relative deprivation explain income satisfaction more than equivalent montly income .

Sen (2000) also suggests a similar process, but he focuses on the effect of actual income distribution.

In this study, I focus my analysis on OECD countries for several reasons. First, relative deprivation theory and the median voter hypothesis implicitly focus on industrialized society. Thus, if I extend the boundaries, I also must explain how relative deprivation theory and the median voter hypothesis are appropriate for underdeveloped countries. In line with this issue, borrowing the post-materialist arguments of Schwartz, greater material richness leads to the greater effects and influence of subjective satisfaction; thus, focusing on industrialized society offers stability for this research. Therefore, the OECD is a reasonable standard for selecting advanced countries, although it is not an absolute one. Finally, the OECD kindly provides consistent macro statistics, which are very helpful for reliable analysis. If I extend the boundaries, I cannot help but mix various and heterogeneous data sources.

Those countries used the new income definition until 2011 because of data limitation: Estonia, South Korea, Netherlands, Sweden, and the United States. Information about the Gini index is obtained from OECD statistics: http://www.oecd.org/social/income-distribution-database.htm.

For more on the Satorra-Bentler Chi square test, see http://www.statmodel.com/chidiff.shtml.

ICC is 0.11 = 0.800/(0.800 + 6.472).

Spending savings and borrowing money does not always mean economic strain; they are sometimes independent of economic strain. Individuals might borrow money because of a temporary liquidity crisis or to purchase high-price durable goods.

The beta coefficients of categorical variables are visibly changed, but it is the result of difference between effect coding and dummy coding. When a researcher focuses on the level-2 effects, dummy coding is more slightly useful than effect coding.

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Titel: Relative Deprivation, Satisfying Rationality, and Support for Redistribution
verfasst von: JaeYoul Shin
Publikationsdatum: 17.10.2017
Verlag: Springer Netherlands
Erschienen in: Social Indicators Research / Ausgabe 1/2018
Print ISSN: 0303-8300
Elektronische ISSN: 1573-0921
DOI: https://doi.org/10.1007/s11205-017-1769-z

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