Perceived Inequality and Redistribution

• In Event: 127 - Section on Inequality, Poverty and Mobility Roundtable Session (one-hour).
  In Paper Session: Section on Inequality, Poverty and Mobility Roundtables (one-hour). Table 01. Inequality and Attitudes

Abstract

Despite the thick literature on inequality, most studies focus on income inequality. They assume that income inequality determines people’s behavior and preference. This article shows that the actual and perceived inequality are not always in tandem. Drawing political and social implications of inequality based on the actual inequality may thus be misleading. For inequality to have social and political effects, people need to perceive inequality. Introducing the concept perceived inequality and tolerance of inequality (gap between the actual and perceived inequality), this article addresses the question of why some countries redistribute more than others. People are more likely to demand for redistribution when perceived inequality is greater than observed inequality; and countries, in which perceived inequality is lower than observed inequality are more likely to have less demand for redistribution.

Author

• Yeon Ju Lee, University of Chicago