How Much Do Citizens Care About Ethnic Wealth Gaps? Inequality and Support for Financial Market Stabilization in Times of Crisis

People value household wealth as a source of private insurance, investment, and social status, which is reflected in their policy preferences. These preferences encourage governments to stabilize financial markets and protect private wealth during major economic crises. However, such policies often exacerbate wealth inequality, including between dominant and subordinate ethnic groups. We explore how citizens evaluate this trade-off by using information treatment and conjoint survey experiments in Australia and the UK in the wake of the COVID crisis. We find that information on ethnic wealth disparities has little, if any, effect on financial stabilization policy preferences, whereas information on ethnicity-neutral wealth inequality reduces support for such stabilization. Additionally, the conjoint experiment reveals greater acceptance of targeted interventions that reduce general wealth disparities than of targeted interventions to alleviate ethnic inequality. Our findings reveal a critical political economy constraint on contemporary policy efforts to address enduring inequities in multiethnic societies.