Survey experiment on government budget deficits in Japan: Effect of loss-framing
35 Pages Posted: 21 May 2019 Last revised: 6 Oct 2020
Date Written: April 19, 2019
Government deficits are considered to prevail because the public is ill-informed about the cost of deficits. To examine the veracity of this statement, this experiment focused on the effect of framing on support for the financial (im)balance of a government’s budget. Participants were required to make an ideal plan by modifying an original budget plan for the Japanese government whose deficit finance is the most prevalent. among mature democracies. They increased rather than decreased deficits when the debt-cost of the real government’s budget was known. They increased deficits when they were shown the list of revenues (losses in tax payments) before they saw the list of expenditures (gains from benefits and services) than vice versa. Support for financial balance was higher when participants had shaped their perception of chronicity of the government debt in daily-life. The effects of loss-framing, however, remained significant when the influence of the perception was controlled.
Keywords: budget deficits, public opinion, survey experiment, taxation, public expenditures, loss-framing, prospect theory
JEL Classification: D72, H6
Suggested Citation: Suggested Citation