The Externalities of Inequality: Fear of Crime and Preferences for Redistribution in Western Europe
Why is the difference in redistribution preferences between the rich and the poor high in some countries and low in others? In this article, we argue that it has a lot to do with the rich and very little to do with the poor. We contend that while there is a general relative income effect on redistribution preferences, the preferences of the rich are highly dependent on the macrolevel of inequality. The reason for this effect is not related to immediate tax and transfer considerations but to a negative externality of inequality: crime.