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Perception of Income Inequality: A Multidimensional Scaling Study

In: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting

Author

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  • Barbara Jancewicz

Abstract

Existing research shows that popular income inequality measures fail to reflect their respondents’ perceptions of income inequality. However, most of the current literature focuses on what is negative, telling us what individuals do not perceive. This paper presents an alternative methodology to help uncover actual perceptions of inequality, how people perceive inequality instead of how they don’t. Multidimensional scaling, a statistical tool for visualizing dissimilarity data as a low-dimensional map, is used on results of a simple grouping task with a given distribution set. The outcome is a perception map that presents respondents’ answers spatially, which enables additional insight into respondents’ thinking. The map created by the respondents’ replies, presented in this paper, indicates that their decisions are driven by two factors: what the biggest gap in incomes of a given distribution is and whether some groups have equal incomes. The result additionally validates multidimensional scaling as a tool for measuring income inequality perception and opens new ways of improving inequality perception questionnaires.

Suggested Citation

  • Barbara Jancewicz, 2014. "Perception of Income Inequality: A Multidimensional Scaling Study," Research on Economic Inequality, in: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting, volume 22, pages 251-272, Emerald Group Publishing Limited.
  • Handle: RePEc:eme:reinzz:s1049-258520140000022008
    DOI: 10.1108/S1049-258520140000022008
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    Cited by:

    1. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Income inequality; inequality; inequality axioms; questionnaire experiments; transfer principle; income transformations; D63;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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