Working Paper: NBER ID: w30001
Authors: Benjamin Enke; Mattias Polborn; Alex Wu
Abstract: This paper develops a theory of political behavior in which values are a luxury good: the relative weight that voters place on values rather than material considerations increases in income. This idea both generates new testable implications and ties together a broad set of empirical regularities about political polarization in the U.S. The model predicts (i) voters who are sufficiently rich to afford voting left; (ii) that more rich than poor people vote against their material interests; (iii) that Democrats are internally more fragmented than Republicans; and (iv) widely-discussed realignments: rich moral liberals who swing Democrat, and poor moral conservatives who swing Republican. Assuming that parties set policies by aggregating their supporters’ preferences, the model also predicts increasing social party polarization over time, such that poor moral conservatives swing Republican even though their relative incomes decreased. We relate these predictions to known stylized facts, and test our new predictions empirically.
Keywords: political polarization; luxury goods; voting behavior
JEL Codes: D03; D72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| income (E25) | likelihood of voting based on values (K16) |
| income (E25) | voting behavior (D72) |
| income (E25) | voting for left-leaning parties (D72) |
| relative income (D31) | prioritization of values over economic concerns (A13) |
| income (E25) | voting against material interests for poor moral conservatives (D72) |
| income (E25) | internal fragmentation among Democrats (D79) |
| income (E25) | internal fragmentation among Republicans (D72) |