Income and policy choices: Evidence from parliamentary decisions and referenda

We analyze political representation of preferences of different income groups by matching referendum outcomes for low, middle, and high-income voters with individual legislators' decisions on identical policy proposals. Results indicate that legislators more closely represent preferences of rich voters than preferences of middle-income and poor voters, and legislators are more responsive towards the rich. Preferences of low, middle, and high-income voters are, however, correlated. Representation of income groups varies according to legislators' party affiliations.