Nick Bunker — Reference points, loss aversion, and redistribution

What’s so interesting about Charité, Fisman, and Kuziemko’s paper is that it indicates that the general public’s preferences for redistribution might be different from what is assumed in the classic optimal taxation research. Their research isn’t the first to point this out, but it provides more proof that the average person might not be a strict utilitarian. This in turn means that the classical economic model that undermines a fair bit of the conversation about the proper level of progressive taxation might be based on some flawed assumptions. The importance of that fact shouldn’t be lost on economists and policymakers.

Washington Center for Equitable Growth 
Reference points, loss aversion, and redistribution
Nick Bunker