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Your Place in the World: Relative Income and Global Inequality

Author

Listed:
  • Dietmar Fehr
  • Johanna Mollerstrom
  • Ricardo Perez-Truglia

Abstract

Although there is abundant evidence on individual preferences for policies that reduce national inequality, there is very little evidence on preferences for policies addressing global inequality. To investigate the latter, we conducted a two-year, face-to-face survey experiment on a representative sample of Germans. We measure how individuals form perceptions of their ranks in the national and global income distributions and how these perceptions relate to their national and global policy preferences. We find that Germans systematically underestimate their true place in the world's income distribution but that correcting those misperceptions does not affect their support for policies related to global inequality.

Suggested Citation

  • Dietmar Fehr & Johanna Mollerstrom & Ricardo Perez-Truglia, 2022. "Your Place in the World: Relative Income and Global Inequality," American Economic Journal: Economic Policy, American Economic Association, vol. 14(4), pages 232-268, November.
    • Handle: RePEc:aea:aejpol:v:14:y:2022:i:4:p:232-68
    DOI: 10.1257/pol.20200343
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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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