I Perceive Therefore I Demand: The Formation of Inequality Perceptions and Demand for Redistribution

48 Pages Posted: 6 Aug 2019

See all articles by Maurizio Bussolo

Maurizio Bussolo

World Bank - Chief Economist Office for Europe and Central Asia

Ada Ferrer-i-Carbonell

World Bank

Anna Barbara Giolbas

World Bank

Ivan Torre

World Bank

Date Written: June 28, 2019

Abstract

This paper investigates the link between inequality and demand for redistribution by looking at how individuals form their perceptions of inequality. Most of the literature analyzing demand for redistribution has focused on objective inequality, rather than subjective perceptions of inequality. However, a model that links demand for redistribution to subjective inequality is needed, given that recent empirical research has shown a growing gap between subjective and objective inequality. Using data from the International Social Survey Programme survey, the paper focuses on explaining individuals' formation of inequality perceptions using objective variables. The paper then studies the relationship between these perceptions and individuals' demand for redistribution. The analysis finds that objective macro variables are associated with individuals' perceptions of inequality, and that individual circumstances, some of which relate to self-interest, like age, educational attainment, and income, also play an important role. Perceptions of equality, in turn, are significatively correlated to demand for redistribution and seem to substitute for any effect of objective variables. This result suggests that contextual macro variables only affect individuals' demand for redistribution through their perceptions of equality and do not have a direct effect.

Keywords: Educational Sciences, Employment and Unemployment, Inequality, Poverty Reduction Strategies, Gender and Development

Suggested Citation

Bussolo, Maurizio and Ferrer-i-Carbonell, Ada and Giolbas, Anna Barbara and Torre, Ivan, I Perceive Therefore I Demand: The Formation of Inequality Perceptions and Demand for Redistribution (June 28, 2019). World Bank Policy Research Working Paper No. 8926. Available at SSRN: https://ssrn.com/abstract=3430538

Maurizio Bussolo (Contact Author)

World Bank - Chief Economist Office for Europe and Central Asia ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://https://blogs.worldbank.org/team/maurizio-bussolo

Ada Ferrer-i-Carbonell

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Anna Barbara Giolbas

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Ivan Torre

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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