Social capital, household income, and preferences for income redistribution

This paper explores how social capital influences individual preferences for income redistribution. Social capital is measured by participation in community activities. After controlling for individual characteristics, I find that people are more likely to express preferences for income redistribution in areas with higher rates of community participation. This is more clearly so in high-income groups than in low-income groups. I infer that individuals' preferences for income redistribution are influenced by psychological externalities. Because the data is from surveys, I also consider the role of expressive behavior. I also consider the hypothesis that behavior is influenced by social distance. ► This paper explores how individual preferences for income redistribution are influenced by social capital. ► Social capital is measured by rates of participation in community activities. ► People are more likely to prefer income redistribution in areas with higher rates of community participation. ► This tendency is more clearly observed in high-income groups than in low-income groups.