Trader Definitions – ‘Robin Hood Effect’

Trader Definitions – ‘Robin Hood Effect’

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.

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