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Misperceiving Inequality

Author

Listed:
  • Gimpelson, Vladimir

    (University of Wisconsin-Madison)

  • Treisman, Daniel

    (University of California, Los Angeles)

Abstract
Since Aristotle, a vast literature has suggested that economic inequality has important political consequences. Higher inequality is thought to increase demand for government income redistribution in democracies and to discourage democratization and promote class conflict and revolution in dictatorships. Most such arguments crucially assume that ordinary people know how high inequality is, how it has been changing, and where they fit in the income distribution. Using a variety of large, cross-national surveys, we show that, in recent years, ordinary people have had little idea about such things. What they think they know is often wrong. Widespread ignorance and misperceptions of inequality emerge robustly, regardless of the data source, operationalization, and method of measurement. Moreover, we show that the perceived level of inequality – and not the actual level – correlates strongly with demand for redistribution and reported conflict between rich and poor. We suggest that most theories about political effects of inequality need to be either abandoned or reframed as theories about the effects of perceived inequality.

Suggested Citation

  • Gimpelson, Vladimir & Treisman, Daniel, 2015. "Misperceiving Inequality," IZA Discussion Papers 9100, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9100
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    References listed on IDEAS

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    More about this item

    Keywords

    biased perceptions; income distribution; inequality; preferences for redistribution;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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