FEEM working papers "Note di lavoro"
2018.015
Date: 4/5/2018

Repeated Shocks and Preferences for Redistribution


Authors:

Giovanni Gualtieri (National Research Council - Institute of Biometeorology); Marcella Nicolini (University of Pavia - Department of Economics and Management); Fabio Sabatini (Sapienza University of Rome - Department of Economics and Law); Luca Zamparelli (Sapienza University of Rome - Department of Economics and Law)

JEL n.: H10, H53, D63, D69, Z1
Keywords: Redistribution, Inequality, Natural Disasters, Earthquakes, Multiple Shocks

Abstract

A society that believes wealth to be determined by random “luck” rather than by merit, demands more redistribution. The theoretical literature shows that any increase in the volatility of income caused by unpredictable adverse shocks implies a higher support for redistribution. We present evidence of this behavior by exploiting a natural experiment provided by the L’Aquila earthquake in 2009, which hit a large area of Central Italy through a series of destructive shakes over eight days. Matching detailed information on the ground acceleration registered during each shock with survey data about individual opinions on redistribution we show that the average intensity of the shakes is associated with subsequent stronger beliefs that, for a society to be fair, income inequalities should be levelled by redistribution. The shocks, however, are not all alike. We find that only the last three shakes - occurred on the fourth and the eighth day of the earthquake - have a statistically significant impact. Overall, we find that the timing and repetition of the shock play a role in shaping redistributive preferences.

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Suggested citation: Gualtieri, G., M. Nicolini, F. Sabatini, L. Zamparelli, (2018), 'Repeated Shocks and Preferences for RedistributionRepeated Shocks and Preferences for Redistribution', Nota di Lavoro 15.2018, Milano, Italy: Fondazione Eni Enrico Mattei


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