Values as Luxury Goods and Political Behavior

Motivated by novel survey evidence, we develop a theory of political behavior in which the relative weight voters place on values rather than material considerations increases in income. The model unifies several stylized facts about U.S. politics and makes new predictions. The luxury goods idea implies – and two datasets confirm – that rich moral liberals are considerably more likely to vote against their economic interests than poor moral conservatives, cautioning against the common narrative that the working class is particularly politically motivated by values. For sufficiently morally-liberal voters, increased income can even reduce the likelihood of voting for Republicans. Rich liberals’ and poor conservatives’ asymmetric priorities also explain why Democrats are internally more heterogeneous than Republicans, and why income and voting Republican are positively correlated across voters but negatively across states. Finally, we interpret the secular partisan realignment of rich moral liberals and poor moral conservatives through our model. (JEL: D72, P10)