Biased Perceptions of Income Inequality and Redistribution
Leibniz Universität Hannover - Economics and Business Administration Area
Leibniz Universität Hannover - Economics and Business Administration Area; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Vienna University of Economics and Business Administration
June 12, 2014
CESifo Working Paper Series No. 4838
When based on perceived rather than on objective income distributions, the Meltzer-Richards hypothesis and the POUM hypothesis work quite well empirically: there exists a positive link between perceived inequality or perceived upward mobility and the extent of redistribution in democratic regimes – though such a link does not exist when objective measures of inequality and social mobility are used. These observations highlight that political preferences and choices might depend more on perceptions than on factual data.
Number of Pages in PDF File: 23
Keywords: biased perception, majority voting, redistribution
JEL Classification: H530, D720, D310
Date posted: July 8, 2014
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