Trader Definitions – ‘Robin Hood Effect’Posted: January 29, 2013
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.