Open AccessElectoral Uncertainty, Income Inequality and The Middle Class
Author(s) -
Mitra Anirban,
Mitra Shabana
Publication year - 2017
Publication title -
the economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.683
H-Index - 160
eISSN - 1468-0297
pISSN - 0013-0133
DOI - 10.1111/ecoj.12318
Subject(s) - voting , inequality , economics , middle class , competition (biology) , yield (engineering) , sample (material) , income distribution , distribution (mathematics) , economic inequality , econometrics , consumption (sociology) , demographic economics , public economics , political science , sociology , politics , market economy , mathematics , mathematical analysis , ecology , social science , chemistry , materials science , chromatography , metallurgy , law , biology
We investigate how electoral competition affects the income distribution in society. We utilise a standard probabilistic voting setup where parties compete at two stages. Our model delivers that greater electoral competition in a district results in equalisation of incomes therein. We check for these relationships using data from Indian national elections which are combined with consumption expenditure data rounds from the National Sample Survey Organization (1987–8 and 2004–5) to yield a district level panel. Our OLS, 2‐SLS and IIV analyses consistently inform that close elections lead to lower inequality and polarisation indicating a larger middle class.