For Richer & for Poorer: Perceptions of Inequality & Support for Redistribution

• In Event: How Information Affects Economic Policy Preferences

Abstract

We know from previous literature that inequality matters for preference formation and that: (1) it matters most for the rich (this may have to do with altruism or fairness or externalities of inequality) and less for the poor who always gain from redistribution irrespective of the level of inequality; and (2) perceptions are an important mediator for preference formation. Given that the rich respond more to differences in inequality, we would also expect the effect of perceptions to be most prevalent among the rich. In this paper, we do two things. First, we assess observationally with ISSP data whether income mediates the relationship between perception and preference. We then conduct a survey experiment explore causal links. We manipulate perceptions by providing pessimistic information on the true level of inequality and update people's beliefs. We show that information about high levels of inequality makes the poor more homogeneously supportive of redistribution, and that it increases the variation of support for redistribution among the rich depending on their fairness/deservingness beliefs.

Authors

• Verena Rebecca Fetscher, University of Hamburg

• David Rueda, University of Oxford