The effect of voters' benefit misperceptions on the tax policy making in a general probabalistic voting framework

Lee, S-K. and Tang, L. (2004) The effect of voters' benefit misperceptions on the tax policy making in a general probabalistic voting framework (Discussion Paper Series - Management, M04-19) Southampton, UK. University of Southampton 30pp.

Abstract

We attempt to examine the effect of benefit misperception on tax policy making in a more general
probabilistic voting framework. In a representative democracy, candidates are thought to be judged by
voters on the basis of both policy and non-policy or random policy characteristics in voters’ voting
decision. We include misperceived benefit levels as a random policy variable which is separate from
tax policy. We suppose that taxes and benefits are separate in relation, and voters have asymmetric
perception about tax and benefit policies proposed by candidates. Thus, voters may have misperception,
or inaccurate perception, of the benefits from public services because of its invisibility. By employ
‘probabilistic linkage’ between tax and benefit policies, we first examine the effect of benefit
misperception on tax policy making in a general probabilistic voting framework. Then, we extend our
earlier paper to include the benefit misperception degree, policy salience, and tax administration costs,
and examine their effects on the political opposition from taxation.

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