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Latin American Middle Classes: The Distance between Perception and Reality

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  • Eduardo Lora

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  • Deisy Johanna Fajardo

Abstract

The main contribution of this paper with respect to previous work is the use of data on subjective perceptions to identify the Latin American middle classes. This paper provides a set of comparisons between objective and subjective definitions of middle-class using data from the 2007 World Gallup Poll. Seven objective income-based definitions of social class are contrasted with a self-perceived social status measure. Mismatches between the objective and the subjective classification of social class are the largest when the objective definition is based on median incomes. Mismatches result from the fact that self-perceived social status is associated not just with income, but also with personal capabilities, interpersonal relations, financial and material assets, and perceptions of economic insecurity. Objective definitions of the middle class based on absolute incomes provide the lowest mismatches and the most accurate differentiation of the middle class from other classes.

Suggested Citation

  • Eduardo Lora & Deisy Johanna Fajardo, 2011. "Latin American Middle Classes: The Distance between Perception and Reality," Research Department Publications 4727, Inter-American Development Bank, Research Department.
  • Handle: RePEc:idb:wpaper:4727
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    References listed on IDEAS

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    1. Milanovic, Branko & Yitzhaki, Shlomo, 2002. "Decomposing World Income Distribution: Does the World Have a Middle Class?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(2), pages 155-178, June.
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    3. Walter Sosa Escudero & Sergio Petralia, 2010. "“I Can Hear the Grass Grow”: The Anatomy of Distributive Changes in Argentina," CEDLAS, Working Papers 0106, CEDLAS, Universidad Nacional de La Plata.
    4. Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-335, December.
    5. Eduardo Lora & Juan Camilo Chaparro, 2008. "The Conflictive Relationship between Satisfaction and Income," IDB Publications (Working Papers) 1633, Inter-American Development Bank.
    6. Nancy Birdsall, 2010. "The (Indispensable) Middle Class in Developing Countries; or, The Rich and the Rest, Not the Poor and the Rest," Working Papers 207, Center for Global Development.
    7. Joe C. Davis & John H. Huston, 1992. "The Shrinking Middle-Income Class: A Multivariate Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 18(3), pages 277-285, Summer.
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    Cited by:

    1. Richard M. Bird & Eric M. Zolt, 2014. "Taxation and inequality in the Americas: Changing the fiscal contract?," Chapters,in: Taxation and Development: The Weakest Link?, chapter 7, pages 193-237 Edward Elgar Publishing.
    2. Emanuela Ghignoni, 2016. "The ‘great escape’ from Italian Universities: Do labour market recruitment channels matter?," QUADERNI DI ECONOMIA DEL LAVORO, FrancoAngeli Editore, vol. 2016(106), pages 49-75.
    3. Eduardo Lora, 2013. "The Distance between Perception and Reality in the Social Domains of Life," IDB Publications (Working Papers) 4608, Inter-American Development Bank.
    4. Fernando Borraz & Nicolas González Pampillón & Máximo Rossi, 2011. "Polarization and the Middle Class," Documentos de trabajo 2011004, Banco Central del Uruguay.
    5. Jose Anchorena & Lucas Ronconi, 2012. "Entrepreneurship, Entrepreneurial Values, and Public Policy in Argentina," Research Department Publications 4798, Inter-American Development Bank, Research Department.
    6. María Gómez-León, 2015. "The Rise of the Middle Class, Brazil (1839-1950)," Working Papers 0091, European Historical Economics Society (EHES).
    7. Bird, Richard M. & Zolt, Eric M., 2015. "Fiscal Contracting in Latin America," World Development, Elsevier, vol. 67(C), pages 323-335.
    8. Chiara Assunta Ricci, 2016. "Perceived Social Position and Objective Inequality: Do They Move Together? Evidence from Europe and the United States," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(3), pages 281-303, November.
    9. Emanuela Ghignoni, 2017. "Who do you know or what do you know? Informal recruitment channels, family background and university enrolments," Working Papers 179, University of Rome La Sapienza, Department of Public Economics.
    10. Chiara Assunta Ricci, 2016. "Perceived Social Position and Income Inequality: Do They Move Together? Evidence from Europe and the United States," LIS Working papers 667, LIS Cross-National Data Center in Luxembourg.
    11. Fernando Borraz & Nicolás González & Máximo Rossi, 2013. "Polarization and the Middle Class in Uruguay," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 50(2), pages 289-326, November.
    12. Francesca Castellani & Gwenn Parent & Jannet Zenteno, 2014. "The Latin American Middle Class: Fragile After All?," IDB Publications (Working Papers) 87419, Inter-American Development Bank.
    13. Gayo, Modesto & Méndez, María Luisa & Teitelboim, Berta, 2016. "Tertiarization in Chile: cultural inequality and occupational structure," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

    More about this item

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D6 - Microeconomics - - Welfare Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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