Economic Equality, Price Controls and Subsidies: Policy Preferences in Five Nations.

Price controls are common in times of war or economic crisis with the aim of curbing inflation, protecting consumers, and promoting economic stability. Subsidies are a common feature of markets in general often with the aim of helping the poor or furthering the interests of farmers and other politically powerful groups. Economists generally oppose both price controls and subsidies on the grounds that they distort market forces leading to inefficiency; higher costs and overproduction (for subsidies) or shortages (for price controls). But price controls and subsidies are often popular with the public. I suggest this popularity is because the public has a further goal in mind unrelated to economic efficiency: the reduction of social inequality. I investigate this possibility using extensive survey data from large, representative national samples in Australia, Bulgaria, The Netherlands, Finland, and Poland (N=13,294). Structural equation estimates correcting for random measurement error show that those with equalitarian values are much more supportive of price controls and subsidies. This holds true after controlling for family income, education, occupational status, sex, age, and church attendance and holds in all five nations. The public in formerly Communist nations show greater support. Ideology is far more important than self-interest or national institutions in shaping attitudes toward price controls and subsidies, although all three matter. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]