Values as Luxury Goods and Political Polarization

Motivated by novel survey evidence, this paper develops a theory of political behavior in which values are a luxury good: the relative weight voters place on values rather than material considerations increases in income. The model predicts (i) voters who are sufficiently rich to afford voting left; (ii) that more rich than poor people vote against their material interests; (iii) that Democrats are internally more fragmented than Republicans; (iv) that income and voting Republican are positively correlated across voters but negatively across states; and (v) the realignment of rich moral liberals and poor moral conservatives. We test our predictions empirically.