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Subjective beliefs about the income distribution and preferences for redistribution

Author

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  • Lionel Page

    (Queensland University of Technology)

  • Daniel G. Goldstein

    (Microsoft Research)

Abstract

We investigate whether beliefs about the income distribution are associated with political positions for or against redistribution. Using a novel elicitation method, we assess individuals’ beliefs about the shape of the income distribution in the United States. We find that respondents’ beliefs approximate the actual distribution on average. However they tend to overestimate the median income and underestimate the level of inequality. Surprisingly we find that beliefs about overall inequality, measured in terms of income dispersion, play only a marginal role in political positions as well as prospects of future wealth. Political preferences, however, are predicted by first, beliefs about the level of income of the poorest members of society, and second, a belief in an open society with equal opportunities for all. Support for redistribution is lower for people who give higher estimates of the income level of the poorest members of society and for people who perceive that opportunities for upward mobility are available.

Suggested Citation

  • Lionel Page & Daniel G. Goldstein, 2016. "Subjective beliefs about the income distribution and preferences for redistribution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(1), pages 25-61, June.
  • Handle: RePEc:spr:sochwe:v:47:y:2016:i:1:d:10.1007_s00355-015-0945-9
    DOI: 10.1007/s00355-015-0945-9
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    3. 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.
    4. Germán Reyes & Leonardo Gasparini, 2022. "Are fairness perceptions shaped by income inequality? evidence from Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 893-913, December.
    5. Mishagina, Natalia & Montmarquette, Claude, 2021. "The role of beliefs in supporting economic policies: The case of the minimum wage," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1059-1087.
    6. Matthew J. Easterbrook, 2021. "The social psychology of economic inequality," WIDER Working Paper Series wp-2021-43, World Institute for Development Economic Research (UNU-WIDER).
    7. Erik Schokkaert & Tom Truyts, 2017. "Preferences for redistribution and social structure," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 545-576, December.
    8. Gimpelson, V. & Chernina, E., 2020. "How we perceive our place in income distribution and how the perceptions deviate from reality," Journal of the New Economic Association, New Economic Association, vol. 46(2), pages 30-56.
    9. Dietmar Fehr & Daniel Müller & Marcel Preuss, 2020. "Social Mobility Perceptions and Inequality Acceptance," Working Papers 2020-02, Faculty of Economics and Statistics, Universität Innsbruck.
    10. Paolo Crosetto & Thomas De Haan, 2022. "Comparing input interfaces to elicit belief distributions," Working Papers 2022-01, Grenoble Applied Economics Laboratory (GAEL).
    11. Kerim Peren Arin & Juan A. Lacomba & Francisco Lagos & Deni Mazrekaj & Marcel Thum, 2021. "Misperceptions and Fake News during the Covid-19 Pandemic," CESifo Working Paper Series 9066, CESifo.
    12. Laméris, Maite D. & Garretsen, Harry & Jong-A-Pin, Richard, 2020. "Political ideology and the intragenerational prospect of upward mobility," European Journal of Political Economy, Elsevier, vol. 62(C).
    13. Natalia Mishagina & Claude Montmarquette, 2018. "The Demand for Economic Policies, Beliefs, and Willingness-to-Pay: The Case of the Minimum Wage Policy in Quebec," CIRANO Project Reports 2018rp-14, CIRANO.
    14. Joseph McMurray, 2017. "Ideology as Opinion: A Spatial Model of Common-Value Elections," American Economic Journal: Microeconomics, American Economic Association, vol. 9(4), pages 108-140, November.
    15. Marino, Maria & Iacono, Roberto & Mollerstrom, Johanna, 2023. "(Mis-)perceptions, information, and political polarization," LSE Research Online Documents on Economics 119268, London School of Economics and Political Science, LSE Library.
    16. Pereira, Diogo Santos & Marques, António Cardoso & Fuinhas, José Alberto, 2019. "Are renewables affecting income distribution and increasing the risk of household poverty?," Energy, Elsevier, vol. 170(C), pages 791-803.
    17. Leonardo Gasparini & Germ'an Reyes, 2022. "Are Fairness Perceptions Shaped by Income Inequality? Evidence from Latin America," Papers 2202.04591, arXiv.org, revised Oct 2022.

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