TITLE:
National Identity and Social Welfare
AUTHORS:
Chee Meng Tan, Yoong Hon Lee, Pek Kim Ng
KEYWORDS:
National Identity, Social Welfare, Taxation, Democracy
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.10,
June
19,
2018
ABSTRACT: This paper investigates the relationship between
national identification and social welfare. Society is a direct democracy where
representative rich and poor agents vote on their most preferred tax rate.
Utilizing the economics of identity, agent utility not only depends on income
but also on social identification. We show that national identification
increases agent utility and social welfare when the rich implements the most
preferred tax rate of the poor, who is also the median voter. Furthermore,
using respondent level of happiness as a proxy for social welfare, we show that
national pride has a positive impact on welfare through logit regression
analysis.