Perceived Inequality and Policy Preferences

40 Pages Posted: 14 Dec 2021

See all articles by Abraham Aldama

Abraham Aldama

University of Pennsylvania

Cristina Bicchieri

University of Pennsylvania

Jana Freundt

University of Pennsylvania - School of Arts & Sciences

Date Written: December 2021

Abstract

Economic inequality in the US has increased since the 1950s, yet this has not been accompanied by increased taxation and redistribution. The question how US Americans (mis-)perceive this inequality and to what extent this perception can translate into a demand for redistribution has therefore become an important policy question and a recent academic debate. We investigate how perceived income inequality causally affects people’s fairness views and their support for redistribution in a comprehensive and well-powered survey experiment with a representative sample of US Americans. We find precisely estimated null effects. While US Americans underestimate the extend of poverty and, in particular, strongly overestimate the income of top earners, there is no evidence for a causal effect of perceived inequality on political views or behavior.

We test the role of a series of moderators and find that this null effect holds for different income groups and party affiliations, as well as for participants with different levels of trust in government and with different levels of perceived personal autonomy. Our study thus suggests that informing people about the extent of inequality in a society will not effectively alter their support for redistributive policies.

Keywords: perceptions of inequality, redistribution, information, fairness, trust, autonomy

JEL Classification: D31, D63, D90, H23

Suggested Citation

Aldama, Abraham and Bicchieri, Cristina and Freundt, Jana, Perceived Inequality and Policy Preferences (December 2021). Available at SSRN: https://ssrn.com/abstract=3977175 or http://dx.doi.org/10.2139/ssrn.3977175

Abraham Aldama

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

Cristina Bicchieri

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States
215-898-5820 (Phone)

Jana Freundt (Contact Author)

University of Pennsylvania - School of Arts & Sciences ( email )

Philadelphia, PA 19104
United States

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