Why Are the Poor Conservative

The observation that as income inequality gets severer the lower income class become more conservative (Kelly and Enns, 2010) is counter-intuitive in that they vote against a redistribution policy that may be beneficial to themselves. The purpose of this letter is to provide a reasonable set of assumptions, or a simple economic model that predicts such an obse rvation. We show that positional externality can explain the observation. Positional goods are ones whose utility mainly depends on how it compares with others in the same category. When the citizens take the positional competition and their labor productivity randomly adjusted after a new public policy is approved, we show that only the middle income citizens may vote for the redistribution policy while the high and the low income citizens vote against. The poor may vote against the redistribution policy when the expected utility gain of the redistribution in absolute terms is smaller than the disutility of the possibility of losing a relative position due to productivity shock. The productivity shock is not a main driving force of yielding the desirable prediction. We cannot explain the observation by adding productivity shocks only. KRF Classification : B020404, B030200, B059900