Department of Political Science

Søren Serritzlew

Causes of Fiscal Illusion: Lack of Information or Lack of Attention?

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Documents

DOI

According to fiscal illusion theory, voters misperceive fiscal parameters because of incomplete information. The costs of public services are underestimated, implying that if voters had full information, their support for public services would drop. The literature has focused on testing the implications of fiscal illusions, whereas the question why fiscal illusions occur at all has received less attention. According to the standard argument, individuals base their opinion of policy proposals on a valuation of benefits and costs. We formalize the standard argument and show that it is a special case of the attention model of fiscal illusion. In this model, opinion depends on the saliency of attributes of the proposal. We show that the attention model can better explain fiscal illusion by deriving competing hypotheses, which are tested in a survey experiment. We conclude that the mechanism behind fiscal illusion is attention and framing, not incomplete information.
Original languageEnglish
JournalPublic Budgeting and Finance
Volume36
Issue2
Pages (from-to)26-44
Number of pages19
ISSN0275-1100
DOIs
Publication statusPublished - 2016

See relations at Aarhus University Citationformats

Download statistics

No data available

ID: 93493437