Presentation at the 19th International Sociological Association (ISA) World Congress of Sociology, Toronto, Canada, July 18, 2018

1. Policy Preference Affected by Perceived Fact on Externality:
Why Do People with Higher Socio‐economic Status
Sometimes Prefer Stronger Income Equalization Policy?
Koji YAMAMOTO
(Hylab LLP and the Open University of Japan)
Presentation at the 19th ISA World Congress of Sociology,
Toronto, Canada, July 18, 2018

2. Overview
• Introduction
• Data
• Analysis for RQ1
• Analysis for RQ2
–Theoretical Model
–Estimation Strategy
–Result
• Conclusion and Discussion
2

3. Introduction
3

4. Introduction
• Focus:
– Preference for redistribution policy
• Background:
– Literature:
Higher SES  Against redistribution
– Background question:
How could people come close to agreement, instead of
conflict, over public policy?
4

5. Introduction
• Emphasis:
– Measurement:
• Concrete level
• Respondents look at “whole picture” of society
“Be‐the‐Government”
– Sources of preference:
• Normative evaluation criteria
• Perceived fact (information on reality)
5

6. Introduction
• RQs:
Using the concrete‐level and whole‐picture type index,
instead of natural‐language based index…
– RQ1:
Does socio‐economic status affect policy preference over
redistribution, and if so, in which direction?
– RQ2:
Does the perceived fact affect policy preference, and if so,
how?
6

7. Data
7

8. Data
• Data
– JHPS: Japan’s nationwide panel survey
– Use responses in 2011 and 2012
• Item: Looking at the whole picture of “a fictional society”…
– Concrete amounts of money for desired redistribution
– Perceived external effect on economic growth
• Created variables:
– EQ: Equality desired
– GR: Growth in case desired policy is implemented
8

9. • Questionnaire Item
– Originally in
Japanese
In fictional society…
– Tax and benefit for
each household
– Unemployment
benefit
– External effect on
economic growth
• Detail: (On‐demand)
9
Questionnaire Item 1. Equalization Policy Preferences
Source: JHPS Questionnaire. The item was originally created by the author in Japanese, and later
translated into English by the survey-supervising organization.
This page concerns tax and social premiums collected by the government, and benefits to ensure one's living.
Q1. In the fictional society below, please suggest the most desirable policy to be taken by the government.
Fictional society:
The society includes households A, B, and C. Each household has 4 persons. The government collects
taxes and social insurance, and uses them to ensure one’s living. If the government does not collect taxes
or social insurance, household A’s income would be 3.5 million yen, B’s 7 million yen, C’s 12.5 million
yen per annum.
(1)How much in taxes and social insurance premiums do you think should be collected, and paid as benefits to
the households? Answer each question in 10,000 yen units. Do not separate taxes and social insurance
premiums, and answer the total amount. If you think no collection or payment is necessary, write 0.
Amount per household that
should be collected
as taxes and social insurance
Payment per household that
should be made to
ensure one’s living
Household A (3.5 million yen per annum) ten thousand yen ten thousand yen
Household B (7 million yen per annum) ten thousand yen ten thousand yen
Household C (12.5 million yen per annum) ten thousand yen ten thousand yen
(2) If someone from one of the households in this society became unemployed, and the income became 0, how
much should the government pay the household per year to ensure their living? Write your answer in
10,000 yen units.
ten thousand yen
(3)Some may think that if the government collects taxes, or pay benefits to every household, it affects
economical growth. If the government in this fictional society decided to introduce the policy that you
suggested in (1) and (2), compared with the government not taking any action, what would happen to
economical growth?
１ It would worsen dramatically.
２ It would worsen slightly.
３ It would not change.
４ It would improve slightly.
５ It would improve dramatically.
６ Not sure.

10. Data
• Questionnaire Item: Enlarged
– Only three households
• Can look at whole picture
– Answer concrete amount of money
10

11. Analysis for RQ1
11

12. • Linear regression
– Dep. Var. = EQ
12Source : JHPS2011-2012
Note: +:p<0.10, *:p<0.05, **:p<0.01
The value of θ is multiplied by 1000 so that the coefficients are decently displayed.
Constant, Male Dummy, and Year Dummy (2012) are also included as explanatory
variables.
Table 1-1. Estimation Results for RQ1
Coef. (S.E.)
Male
Age/100 0.002 (0.048)
Married -0.006 (0.017)
Higher Education 0.031 *
(0.013)
White Collar 0.004 (0.014)
Household Income (Log) 0.016 (0.011)
Female
Age/100 0.080 (0.054)
Married -0.008 (0.018)
Higher Education 0.052 **
(0.019)
White Collar 0.004 (0.016)
Household Income (Log) 0.013 (0.011)
N of Obs. 3084
R
2
0.011
Explanatory Variables
Model 1
Dep. Var.
EQ

13. • Higher education:
– Desires stronger
equalization (!)
• Higher SES  Favors less
redistribution?
– No such evidence (!)
13Source : JHPS2011-2012
Note: +:p<0.10, *:p<0.05, **:p<0.01
The value of θ is multiplied by 1000 so that the coefficients are decently displayed.
Constant, Male Dummy, and Year Dummy (2012) are also included as explanatory
variables.
Table 1-1. Estimation Results for RQ1
Coef. (S.E.)
Male
Age/100 0.002 (0.048)
Married -0.006 (0.017)
Higher Education 0.031 *
(0.013)
White Collar 0.004 (0.014)
Household Income (Log) 0.016 (0.011)
Female
Age/100 0.080 (0.054)
Married -0.008 (0.018)
Higher Education 0.052 **
(0.019)
White Collar 0.004 (0.016)
Household Income (Log) 0.013 (0.011)
N of Obs. 3084
R
2
0.011
Explanatory Variables
Model 1
Dep. Var.
EQ

14. Analysis for RQ2:
Theoretical Model
14

15. Analysis for RQ2:
Theoretical Model
• IEF:
– Individual Evaluation Function
on Status of Society
– Stands for evaluation criteria
• Evaluating with respect to:
(EQ, GR)
• Tau (τ):
Desired EQ w/o considering GR
• Status quo: Pre‐redistribution
(EQ0, GR0)
• One specific evaluation criteria
15
GR
EQ
Panel (a)
Status Quo
(EQ0,GR0)
Contour of IEF Values
Evaluated High
Evaluated Medium
Evaluated Low

16. Analysis for RQ2:
Theoretical Model
• Assume :
One prefers the policy…
– Maximizing evaluation
value
– Under perceived restriction
(perceived fact)
– Theta (θ) represents
perceived restriction
• Answered EQ and GR:
– Optimal point for them
16
GR
EQ
Panel (b)
Restriction Line (θ < 0)
Optimal Point (θ < 0)

17. Analysis for RQ2:
Theoretical Model
• Same evaluation criteria
• Different perceived restriction
Optimal points vary
– Person A: “Gov’t should
redistribute more because it
enhances growth!”
– Person B: “Gov’t should
redistribute less because such
a policy harms growth!”
17
GR
EQ
Panel (e)
A
B

18. Analysis for RQ2:
Estimation Strategy
18

19. Analysis for RQ2:
Estimation Strategy
• Linear regression
• Two estimations:
(Model 1 was done before)
– Model2:
• Individual characteristic  Perceived fact (Theta)
– Model3:
• {Individual characteristic, Perceived fact (Theta)}
 Policy preference (EQ)
19

20. Analysis for RQ2:
Estimation Strategy
• Diagram
20
Figure 2. Diagram for Estimated Equations
Explained Variable EQ
Policy Preference
"How much redistribution
should Gov't conduct?"
Parameter Theta (θ)
Perceived Facts
"How much does redistribution
improve economic growth?"
Parameter Tau (τ)
Normative Criteria for Equality
"What is the desirable equality,
other factors being the same?"
Explanatory Variables
Individual Characteristics
e.g. Higher Education

21. Analysis for RQ2:
Estimation Strategy
• We can interpret the effect of Tau from the result where the
dependent variable is EQ
21
Figure 3. Diagram for Estimated Equations, Tau Hidden
Explained Variable EQ
Policy Preference
"How much redistribution
should Gov't conduct?"
Parameter Theta (θ)
Perceived Facts
"How much does redistribution
improve economic growth?"
Parameter Tau (τ)
Normative Criteria for Equality
"What is the desirable equality,
other factors being the same?"
Explanatory Variables
Individual Characteristics
e.g. Higher Education

22. Analysis for RQ2:
Result
22

23. 23
Table 1-2. Estimation Results
Coef. (S.E.) Coef. (S.E.) Coef. (S.E.)
0.013 *
(0.005)
Male
Age/100 0.002 (0.048) 0.522 *
(0.244) -0.005 (0.048)
Married -0.006 (0.017) 0.105 (0.075) -0.007 (0.017)
Higher Education 0.031 *
(0.013) 0.144 **
(0.054) 0.029 *
(0.013)
Female
Age/100 0.080 (0.054) 0.009 (0.335) 0.080 (0.054)
Married -0.008 (0.018) 0.269 **
(0.093) -0.012 (0.018)
Higher Education 0.052 **
(0.019) 0.162 *
(0.074) 0.050 **
(0.019)
Source : JHPS2011-2012
Note: +:p<0.10, *:p<0.05, **:p<0.01
The value of θ is multiplied by 1000 so that the coefficients are decently displayed.
θ
(Perceived Improvement of
Growth by Unit Equalization)
--- ---
R
2
0.011 0.011
For both genders, White Collar and Household Income (Log) are included but turn out to
be insignificant. Constant, Male Dummy, and Year Dummy (2012) are also included.
0.016
N of Obs. 3084 3084 3084
Explanatory Variables
Model 1 Model 2 Model 3
Dep. Var. Dep. Var. Dep. Var.
EQ θ EQ

24. Analysis for RQ2:
Result
• Let us recall:
24
Figure 3. Diagram for Estimated Equations, Tau Hidden
Explained Variable EQ
Policy Preference
"How much redistribution
should Gov't conduct?"
Parameter Theta (θ)
Perceived Facts
"How much does redistribution
improve economic growth?"
Parameter Tau (τ)
Normative Criteria for Equality
"What is the desirable equality,
other factors being the same?"
Explanatory Variables
Individual Characteristics
e.g. Higher Education

25. 25
Table 1-2. Estimation Results
Coef. (S.E.) Coef. (S.E.) Coef. (S.E.)
0.013 *
(0.005)
Male
Age/100 0.002 (0.048) 0.522 *
(0.244) -0.005 (0.048)
Married -0.006 (0.017) 0.105 (0.075) -0.007 (0.017)
Higher Education 0.031 *
(0.013) 0.144 **
(0.054) 0.029 *
(0.013)
Female
Age/100 0.080 (0.054) 0.009 (0.335) 0.080 (0.054)
Married -0.008 (0.018) 0.269 **
(0.093) -0.012 (0.018)
Higher Education 0.052 **
(0.019) 0.162 *
(0.074) 0.050 **
(0.019)
Source : JHPS2011-2012
Note: +:p<0.10, *:p<0.05, **:p<0.01
The value of θ is multiplied by 1000 so that the coefficients are decently displayed.
θ
(Perceived Improvement of
Growth by Unit Equalization)
--- ---
R
2
0.011 0.011
For both genders, White Collar and Household Income (Log) are included but turn out to
be insignificant. Constant, Male Dummy, and Year Dummy (2012) are also included.
0.016
N of Obs. 3084 3084 3084
Explanatory Variables
Model 1 Model 2 Model 3
Dep. Var. Dep. Var. Dep. Var.
EQ θ EQ

26. Analysis for RQ2:
Result
• Effect through perceived fact exists
26
Figure 3. Diagram for Estimated Equations, Tau Hidden
Explained Variable EQ
Policy Preference
"How much redistribution
should Gov't conduct?"
Parameter Theta (θ)
Perceived Facts
"How much does redistribution
improve economic growth?"
Parameter Tau (τ)
Normative Criteria for Equality
"What is the desirable equality,
other factors being the same?"
Explanatory Variables
Individual Characteristics
e.g. Higher Education

27. 27
Table 1-2. Estimation Results
Coef. (S.E.) Coef. (S.E.) Coef. (S.E.)
0.013 *
(0.005)
Male
Age/100 0.002 (0.048) 0.522 *
(0.244) -0.005 (0.048)
Married -0.006 (0.017) 0.105 (0.075) -0.007 (0.017)
Higher Education 0.031 *
(0.013) 0.144 **
(0.054) 0.029 *
(0.013)
Female
Age/100 0.080 (0.054) 0.009 (0.335) 0.080 (0.054)
Married -0.008 (0.018) 0.269 **
(0.093) -0.012 (0.018)
Higher Education 0.052 **
(0.019) 0.162 *
(0.074) 0.050 **
(0.019)
Source : JHPS2011-2012
Note: +:p<0.10, *:p<0.05, **:p<0.01
The value of θ is multiplied by 1000 so that the coefficients are decently displayed.
θ
(Perceived Improvement of
Growth by Unit Equalization)
--- ---
R
2
0.011 0.011
For both genders, White Collar and Household Income (Log) are included but turn out to
be insignificant. Constant, Male Dummy, and Year Dummy (2012) are also included.
0.016
N of Obs. 3084 3084 3084
Explanatory Variables
Model 1 Model 2 Model 3
Dep. Var. Dep. Var. Dep. Var.
EQ θ EQ

28. Analysis for RQ2:
Result
• Still, regardless of Theta, education has effect on EQ
– Better‐educated people tend to be more pro‐
redistribution regardless of improvement of growth
28
Figure 3. Diagram for Estimated Equations, Tau Hidden
Explained Variable EQ
Policy Preference
"How much redistribution
should Gov't conduct?"
Parameter Theta (θ)
Perceived Facts
"How much does redistribution
improve economic growth?"
Parameter Tau (τ)
Normative Criteria for Equality
"What is the desirable equality,
other factors being the same?"
Explanatory Variables
Individual Characteristics
e.g. Higher Education

29. Analysis for RQ2:
Result
• Two paths:
– Higher education  redistributive preference
• Through perceived fact
– Effect through this path looks small
• Through normative criterion on equality itself
29

30. Conclusion
and
Discussion
30

31. Conclusion and Discussion
• Answer to RQs:
– RQ1:
• Higher SES never makes people prefer less
redistribution
• Higher education makes people prefer more
redistribution
– RQ2:
• Perceived fact affects preference
– Higher education has effect through perceived fact
31

32. Conclusion and Discussion
• Implication:
Possibilities to enhance “approach to agreement” through…
– Measuring concrete level
– Sharing knowledge on reality
• Discussion
– Effect of education etc. … Why?
• Demand‐side economics?
• Win‐win solution?
• Other possibilities
– Other points (to be discussed on demand)
32

33. 33
References
Alesina, Alberto, and Paola Giuliano. 2011. “Preference
for Redistribution.” Jess Benhabib,
Alberto Bisin, and Matthew O. Jackson, eds. Handbook
of Social Economics Volume 1A. North Holland: 93‐131.
Blekesaune, Morten, and Jill Quadagno. 2003. “Public
Attitudes toward Welfare State Policies: A Comparative
Analysis of 24 Nations.” European Sociological Review
19 (5): 415‐427.
Dallinger, Ursula. 2010. “Public Support for
Redistribution: What Explains Cross‐national
Differences?” Journal of European Social Policy 20 (4):
333‐349.
Giger, Nathalie, and Moira Nelson. 2013. “The Welfare
State or the Economy? Preferences, Constituencies, and
Strategies for Retrenchment.” European Sociological
Review 29 (5): 1083‐1094.
Huber, Gregory A., and Celia Paris. 2013. “Assessing the
Programmatic Equivalence Assumption in Question
Wording Experiments: Understanding Why Americans
Like Assistance to the Poor More Than Welfare.” Public
Opinion Quarterly 77 (1): 385‐397.
Kuziemko, Ilyana, Michael I. Norton, Emmanuel Saez,
and Stefanie Stantcheva. 2015. “How Elastic Are
Preferences for Redistribution? Evidence from
Randomized Survey Experiments.” American Economic
Review 105 (4): 1478–1508.
Miyauchi, Tamaki. 2013. “Measuring Japanese
Constituency Preferences for Income Redistribution
Policy and Effects by the Great Earthquake of Eastern
Japan in 2011.” Joint Research Center for Panel Studies
Discussion Paper Series DP‐2012‐007.
Ohtake, Fumio, and Jun Tomioka. 2004. “Who Supports
Redistribution?” The Japanese Economic Review 55 (4):
333‐354.
Takegawa, Shogo. 2010. “Liberal Preferences and
Conservative Policies: The Puzzling Size of Japan’s
Welfare State.” Social Science Japan Journal 13 (1): 53‐
67.
Yamamoto, Koji, and Ryotaro Fukahori. 2011. “Methods
to Measure and Model Attitude toward Equalization:
Searching for Democratically Justifiable Criteria for
Policy Evaluation” (in Japanese). Joint Research Center
for Panel Studies Discussion Paper Series DP2011‐001.
Data Sources
Solt, Frederick. 2016. “The Standardized World Income
Inequality Database.” Social Science
Quarterly 97. SWIID Version 6.0, July 2017.
World Bank. 2017. World Development Indicators. (Last
Updated September 18, 2017; Datasets are retrieved
from https://data.worldbank.org/country/japan).

34. Thank you for your warm attention!
Comments are welcome!!
E‐mail: kojiy@kojiy.org
34
Acknowledgement
This study has been supported by JSPS KAKENHI Grant Numbers JP18H00033,
JP16H00287, JP11J06528, and JP18830018. The data for this analysis, Japan
Household Panel Survey (JHPS/KHPS), was provided by the Keio University
Panel Data Research Center. This work was supported by the MEXT‐Supported
Program for the Strategic Research Foundation at Private Universities of
Japan, 2014‐2018 (S1491003).

35. On‐Demand Slides
35

36. Data
• Questionnaire Item
36
Fictional society:
The society includes households A, B, and C. Each household has
4 persons. The government collects taxes and social insurance,
and uses them to ensure one’s living. If the government does not
collect taxes or social insurance, household A’s income would be
3.5 million yen, B’s 7 million yen, C’s 12.5 million yen per annum.
(1) How much in taxes and social insurance premiums do you
think should be collected, and paid as benefits to the
households? Answer each question in 10,000 yen units. Do not
separate taxes and social insurance premiums, and answer the
total amount. If you think no collection or payment is necessary,
write 0.

37. Data
• Questionnaire Item
37
(2) If someone from one of the households in this society became
unemployed, and the income became 0, how much should the
government pay the household per year to ensure their living? Write
your answer in 10,000 yen units.
(3) Some may think that if the government collects taxes, or pay
benefits to every household, it affects economical growth. If the
government in this fictional society decided to introduce the policy
that you suggested in (1) and (2), compared with the government not
taking any action, what would happen to economical growth?
[Alternatives: 1. It would worsen dramatically. / 2. It would worsen
slightly. / 3. It would not change. / 4. It would improve slightly. / 5. It
would improve dramatically. / 6. Not sure. ]

38. Analysis for RQ2:
Theoretical Model
• We develop a theoretical model which assumes individual
redistributive preference may be affected by the perceived
fact about relationship between redistribution and economic
growth
• Concretely, we assume each person has IEF (Individual
Evaluation Function on Status of Society) and one prefers the
policy which maximize the evaluated value under perceived
restriction
38

39. Analysis for RQ2:
Theoretical Model
• Model:
– IEF is evaluated with the equality, EQ, and the economic growth,
GR, and also with parameters of normative criteria
– There is a perceived restriction in each person’ s mind as follow
– The parameter Theta (θ) reflect the perceived fact
– Maximizing IEF subject to the restriction, the optimal values of
EQ and GR are obtained
39
  GREQIEF iiii  )1()( 2

)( 00 EQEQGRGR i  
iiiiiEQ   2/)1(*
00
**
)( GREQEQGR iii  

40. Analysis for RQ2:
Estimation Strategy
• We are to estimate how individual characteristics affect the
parameters in the theoretical model
• Estimation method
– Let us assume the responses of EQ and GR, which optimize IEF,
for each individual
– From the above formulas, Theta (θ) is directly estimated
if EQi ≠ EQ0
– We associate Tau (τ) and Theta (θ) with individual characteristic
variable vector, zi, and unobserved disturbances
– Using aforementioned formula, EQ can be written as follow
where
40
)/()( 00 EQEQGRGR iii 
ii ,  τi βz ii ,  θi βz
iiiEQ ,  τi βz
 2/)1(  )21/(1  

41. Analysis for RQ2:
Estimation Strategy
• Two Estimation Equations
– We conduct simple OLS for the equations of Theta and EQ
41
ii ,  θi βz
iiiEQ ,  τi βz

42. Analysis for RQ2:
Estimation Strategy
• Variables of main interest: (answered = optimal) EQ and GR
– EQ is based on Gini coefficient after redistribution
• To include information of assured minimum income and to
avoid bias, a continuous income distribution is used; Gini is
calculated from the distribution, by a Monte Carlo method
• EQ is obtained by monotonically decreasing transformation
of the resultant Gini coefficient
– GR is a value which corresponds to the expression in a natural
language, like “worsen dramatically”
• We conducted another small survey to assign each value, i.e.
a concrete amount, for each natural‐language expression of
“growth in growth”
• Other variables: gender, age, marital status, higher education, white
collar job, household income
42

43. Analysis for RQ2:
Result
• Results
– Pooled OLS with cluster robust standard error estimates
• Model 1: simple analysis
– EQ is affected by education
– The better‐educated prefer stronger redistribution (!)
• Model 2: explaining Theta, i.e. the perceived external effect of
redistribution on growth
– Theta is affected by education, too
• The better‐educated people tend to think redistribution
improves growth, rather than harms it
43

44. Analysis for RQ2:
Result
• Model 3: estimating the effect of Theta (θ) on EQ, and the effects of
individual characteristics on EQ through Tau (τ)
– Theta affects EQ; this implies GR is considered when IEF is
evaluated
• We can interpret higher education affects EQ through Theta,
i.e. perceived facts
– Education has effect on EQ through Tau
• The better‐educated people tend to be more pro‐
redistribution regardless of improvement of growth
• The results imply there are two paths where higher education
affects redistributive preference
– Through the perceived fact
– Through the normative criterion
– The effect through the former path might be small
44

45. Conclusion and Discussion
• Finding:
Using concrete‐level and whole‐picture type measurement…
– Higher education  Favors stronger redistribution
– Perceived fact  Redistributive policy preference
• Higher education  Perceived fact  Preference
– Normative criteria (w/o considering GR)  Preference
• Higher education  Normative criteria  Preference
• Larger effect
45

46. Conclusion and Discussion
• Discussion
– Small effect through perceived fact?
But worth further investigation
– Many assumptions  Need to check robustness
– Possibility:
Determine “collective preference order”
Utilizing normative criteria to evaluate society by
concrete level
46

47. Conclusion and Discussion
• Contributions:
– Preceding studies argue the better‐educated tend to prefer
less redistribution
• We show that, when preference is measured by
concrete‐level and whole‐picture values, tendency is
reversed
– Preceding studies argue perceived information on facts
affects preference
• We show the result consistent with these arguments,
using our measurement
47

48. Appendix:
Well‐being Research
and Policy Preference
48

49. Appendix A: Well‐being Research
and Policy Preference
• Focus on “well‐being” as an outcome of public policy
– Government can do something to improve via public policy
– Ordinary people would have various views
• Concepts of “well‐being”: Figure 1
– This study investigate policy preference
– Policy preference might related to other aspects of
individuals’ subjective evaluations
49

50. 50
Self Society
No Particular
Assumed
Measures
Subjective
Well-being
such as
Happiness
e.g. Perception of
(Un)Fairness in
Society
Policy
Intervention
"How does the Gov't
Work for Me?"
Policy Preference
Assumed
Solution
Measures
What is Evaluated?
Figure A1. Individual Subjective Evaluation
on Various Kinds of Well-being