Working Paper: NBER ID: w14556
Authors: Rafael Di Tella; Juan Dubra; Robert Macculloch
Abstract: We study the correlation between a belief concerning individualism and a measure of luck in the US during the period 1983-2004. The measure of beliefs is the answer to a question related to whether the poor should be helped by the government or if they should help themselves, while the measure of luck is the share of the oil industry in the state's economy multiplied by the price of oil. The correlation is negative, suggesting that more reliance on luck is correlated with less individualism. We provide three short models that help interpret this correlation. One implication of this finding is that societies that depend heavily on oil, and perhaps natural resources more generally, will experience a heavier demand for government intervention. We argue that if a government cares about the impact of its natural resource policies on the demand of government intervention more generally, it should take this effect into account.
Keywords: oil; individualism; government intervention; luck; beliefs
JEL Codes: E62; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| oil prices (L71) | individuals perceive economic outcomes as dependent on luck (D80) |
| individuals perceive economic outcomes as dependent on luck (D80) | preference for government intervention (D72) |
| oil prices (L71) | individuals feel richer (D12) |
| individuals feel richer (D12) | support for government assistance for the poor (H53) |
| higher oil dependence (L71) | perceptions of unfairness in income distribution (D31) |
| perceptions of unfairness in income distribution (D31) | demand for higher taxes and government intervention (H29) |
| one standard deviation increase in luck (C29) | reduces belief that poor should help themselves (H53) |