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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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    2. Knell, Markus & Stix, Helmut, 2020. "Perceptions of inequality," European Journal of Political Economy, Elsevier, vol. 65(C).
    3. 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.
    4. 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.
    5. Dietmar Fehr & Daniel Müller & Marcel Preuss, 2020. "Social Mobility Perceptions and Inequality Acceptance," Working Papers 2020-02, Faculty of Economics and Statistics, University of Innsbruck.
    6. 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.
    7. 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.
    8. 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).
    9. 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.
    10. 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).

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