Université de Lausanne
Faculté des HEC
Département d'économétrie et d'économie politique

Cahier de recherches économiques du DEEP No. 13.07

Jo Thori Lind and Dominic Rohner

Knowledge is power
A theory of information, income, and welfare spending

April 2013

Abstract
No voters cast their votes based on perfect information, but richer voters are on average best informed. We develop a model where the voting mistakes resulting from low political knowledge reduce the weight of poor voters, and cause parties to choose political platforms that are better aligned with the preferences of rich voters. In US election survey data, income is more important in affecting voting behavior for more informed voters than for less informed voters. Further, when there is a strong correlation between income and political information, Congress representatives vote more conservatively, which is also in line with our theory.

Keywords: Redistribution; Welfare Spending; Information; Income; Voting; Political Economics

JEL classification: D31; D72; D82; H53