Neighborhoods, Perceived Inequality, and Preferences for Redistribution :Evidence from Barcelona

study the effects of neighborhoods on perceived inequality and preferences for redistribution. Using administrative data on the universe of dwellings and real estate transactions in Barcelona (Spain), I construct a novel measure of local inequality — the Local Neighborhood Gini (LNG). The LNG is based on the spatial distribution of housing within a city, independent of administrative boundaries, and building-specific. I elicit inequality perceptions and preferences for redistribution from an original large-scale survey conducted in Barcelona. I link those to respondents’ specific local environments using exact addresses. I find that a one standard deviation increase inLNGis associated with 4% higher perceived inequality, but with (if anything) lower demand for redistribution. Residential sorting explains the counter-intuitive pattern. To causally identify the effects of local environments, I exploit within-neighborhood variation from the rise of new apartment buildings as a quasi-experiment. Exposure to new buildingsincreases perceived inequality by 7% and demand for redistribution by 1%. Effects come from higher perceived income at the top. Local environments shape inequality perceptions and (to a lesser extent) demand for redistribution.