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

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  • Maurizio Bussolo
  • Ada Ferrer‐i‐Carbonell
  • Anna Giolbas
  • Iván Torre

Abstract

This paper shows that perceptions of inequality matter for demand for redistribution and investigates how individuals form their perceptions. Using data from the ISSP, we present new evidence on the significant changes of perceptions of inequality for more than 20 countries during the last three decades and how these are not in synch with changes in objective inequality. Rather than indicating misperceptions, these discrepancies reflect a broader view of inequality that for most individuals encompasses poverty, insecurity in the labor markets, availability of public goods in addition to objective income disparities. We then show that these perceptions have much stronger correlation with demand for redistribution than objective inequality, or any of the mentioned contextual variables that mold perceptions. Ideology and self‐interest also contribute to demand for redistribution. Much more than those on the left, right‐leaning individuals adjust their demand for redistribution in line with their inequality perceptions.

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  • Maurizio Bussolo & Ada Ferrer‐i‐Carbonell & Anna Giolbas & Iván Torre, 2021. "I Perceive Therefore I Demand: The Formation of Inequality Perceptions and Demand for Redistribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(4), pages 835-871, December.
    • Handle: RePEc:bla:revinw:v:67:y:2021:i:4:p:835-871
    DOI: 10.1111/roiw.12497
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    Cited by:

    1. Riccardo Bruni & Alessandro Gioffré & Maria Marino, 2022. ""In-group bias in preferences for redistribution: a survey experiment in Italy"," IREA Working Papers 202223, University of Barcelona, Research Institute of Applied Economics, revised Nov 2023.
    2. Miguel Niño-Zarazúa & Francesca Scaturro & Vanesa Jordá & Finn Tarp, 2023. "Income Inequality and Redistribution in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 32(Supplemen), pages 296-319.
    3. Michał Litwiński & Rafał Iwański & Łukasz Tomczak, 2023. "Acceptance for Income Inequality in Poland," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 166(2), pages 381-412, April.
    4. Antonino Callea & Dalila De Rosa & Giovanni Ferri & Francesca Lipari & Marco Costanzi, 2022. "Can Emotional Intelligence promote Individual Wellbeing and protect from perceptions' traps?," CERBE Working Papers wpC39, CERBE Center for Relationship Banking and Economics.
    5. Maurizio Bussolo & Daniele Checchi & Vito Peragine, 2018. "The long term evolution of inequality of opportunity," LIS Working papers 730, LIS Cross-National Data Center in Luxembourg.
    6. Martinangeli, Andrea F.M. & Windsteiger, Lisa, 2023. "Immigration vs. poverty: Causal impact on demand for redistribution in a survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    7. Benoît Walraevens, 2021. "The triumph of injustice. Wealth, tax evasion and democracy [Inégalités économiques, justice fiscale et démocratie aux USA]," Post-Print hal-03554121, HAL.
    8. Fazio, Andrea, 2022. "Attractiveness and preferences for redistribution," Economics & Human Biology, Elsevier, vol. 46(C).
    9. Sarah Perret, 2021. "Why were most wealth taxes abandoned and is this time different?," Fiscal Studies, John Wiley & Sons, vol. 42(3-4), pages 539-563, September.
    10. Maurizio Bussolo & Daniele Checchi & Vito Peragine, 2023. "Long-term evolution of inequality of opportunity: Educated parents still matter," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(2), pages 277-323, June.
    11. Andrea Fazio, 2021. "Beautiful inequality: Are beautiful people more willing to redistribute?," Working Papers in Public Economics 194, University of Rome La Sapienza, Department of Economics and Law.
    12. Alexandru Cojocaru & Mame Fatou Diagne, 2021. "Redistributive preferences in Europe and Central Asia, 2006–2016," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(1), pages 151-172, January.
    13. Brzezinski, Michal & Myck, Michał & Najsztub, Mateusz, 2022. "Sharing the gains of transition: Evaluating changes in income inequality and redistribution in Poland using combined survey and tax return data," European Journal of Political Economy, Elsevier, vol. 73(C).

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