Robin Hood Effect

AAA

DEFINITION of 'Robin Hood Effect'

A phenomenon where the less well-off gain at the expense of the better-off. The Robin Hood effect gets its name from the folkloric outlaw Robin Hood, who, according to legend, stole from the rich to give to the poor. A reverse Robin Hood effect occurs when the better-off gain at the expense of the less well-off.

INVESTOPEDIA EXPLAINS 'Robin Hood Effect'

The term "Robin Hood effect" is most commonly used in discussions of income inequality and educational inequality. For example, a government that collects higher taxes from the rich and lower or no taxes from the poor, and then uses that tax revenue to provide services for the poor, creates a Robin Hood effect.

RELATED TERMS
  1. Capitalism

    A system of economics based on the private ownership of capital ...
  2. Egalitarianism

    A philosophical thought system that emphasizes equality and equal ...
  3. Income Inequality

    The unequal distribution of household or individual income across ...
  4. Poverty Gap

    The average shortfall of the total population from the poverty ...
  5. Economics

    A social science that studies how individuals, governments, firms ...
  6. Progressive Tax

    A tax that takes a larger percentage from the income of high-income ...
Related Articles
  1. Budgeting

    Stop Keeping Up With The Joneses - They're Broke

    Conspicuous consumption could be robbing you of future wealth.
  2. Personal Finance

    Pass On Wealth To Spread Holiday Cheer

    Find out why money can sometimes be the perfect gift.
  3. Investing Basics

    Young Investors: What Are You Waiting For?

    By investing at a younger age, you can harness the power of compounding - not penny-pinching - for profit.
  4. Entrepreneurship

    Tips For Handling Sudden Wealth

    With sudden wealth comes increased responsibility. Read this advice so you don't become a riches-to-rags story.
  5. Professionals

    How To Become A Self-Taught Finance Expert

    A wealth of information is at your fingertips, and getting started is easy.
  6. Options & Futures

    3 Simple Steps To Building Wealth

    Getting richer is easier if you take it one step at a time.
  7. Personal Finance

    Share The Wealth With Franchises

    Skip the first step and build off of someone else's successful business model.
  8. Fundamental Analysis

    What is Gearing?

    Gearing, also called leverage, is the degree to which a company’s operations are funded by lenders versus shareholders.
  9. Economics

    Understanding Money Supply

    Money supply – also called money stock -- refers to the total amount of currency and other liquid financial products in an economy at a particular time.
  10. Economics

    What is a Wholly Owned Subsidiary?

    A company whose common stock is 100% owned by another company, called the parent company.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center