Social Identity, Economic Policy, and Citizenship

In contrast to the methodological individualism common in traditional
economic analysis, people often understand society and themselves
in terms of social groups such as countries, regions, or ethnicities.
Extending a growing literature in identity economics, this project
investigates how feelings of connection, belonging, or identification
with such groups – well established in social psychology – may
shape individual preferences, policy outcomes, and behavior. These
are particularly relevant to issues central to public economics, which
often entail our willingness to share with – or appropriate from – one
another. Thus the traditional neglect in economics of social identities
impedes full explanations of public policies, and those who support or
oppose them.
Employing both theoretical and empirical analysis, this project
applies two tenets of social identity: other-regarding preferences,
particularly in-group favoritism, and the prescriptive effect of group
norms. WP1 considers the cleavages which divide society in to
subgroups, and how identification with (combinations of) these may
influence preferences for redistributive public policy. WP2 turns the
identity lens to the important setting of tax competition among
jurisdictions, where the extent of in-groups can either lessen or
aggravate the costly tendency toward under-provision of public
goods. WP3 exploits a novel natural experiment to test real world
compliance with group norms and concern for group reputation.