Beyond the Município Inequality Preferences with Electoral Implication in Brazil

• In Event: Local Context, Personal Experience, and Redistributive Preferences

Abstract

This study delves into a paradox prevalent in Latin America: despite high levels of inequality, redistribution is moderate. It specifically examines Brazil to understand how preferences for redistribution are formed and subsequently translate into actual demand for redistributive politics. While literature has linked individual income, fairness considerations, and educational background to preferences toward redistribution, two critical empirical questions remain unresolved. The first concerns the scope of voter concern: whether it is confined to the welfare of smaller, proximate groups or extends to the broader welfare of society. Second, how voters form their beliefs about income inequality? I adopt a utility function that captures the interaction between an individual’s perceived inequality and their inequality aversion at both local and national levels. Using data from an original survey, analyses following the utility function reveal that individuals tend to use local levels of inequality as a benchmark for forming perceptions of both local and national inequality. However, they tend to overestimate national inequality while underestimating local inequality. A higher interaction term between perceived local inequality and inequality aversion correlates with a stronger preference for redistribution, as measured by willingness to reduce inequality at personal expense. Additionally, higher perceived local inequality is linked to increased support for Lula in the 2018 and 2022 Brazilian presidential elections. There is a 0.7% increase in the probability of voting for Lula for each unit increase in perceived local inequality. This paper contributes by empirically identifying who individuals care about, disentangling preferences for redistribution from beliefs about inequality, and exploring the political implications of these findings.

Author

• Yuhan Zheng, Princeton University