Misperceiving inequality

TLDR

Economic inequality is widely studied for its political and policy consequences, with higher inequality thought to increase demand for redistribution in democracies and to discourage democratization while fueling class conflict in dictatorships, yet these arguments assume that ordinary people know inequality levels and their position in the distribution. The study demonstrates that ordinary people lack accurate knowledge of inequality and proposes reframing political theories to focus on perceived inequality rather than actual levels. The authors analyze data from multiple large cross‑national surveys to assess public perceptions of inequality. Widespread ignorance and misperceptions persist regardless of data source, operationalization, and measurement method, and perceived inequality—not actual inequality—strongly correlates with demand for redistribution and reported conflict between rich and poor.

Abstract

Abstract A vast literature suggests that economic inequality has important consequences for politics and public policy. Higher inequality is thought to increase demand for income redistribution in democracies and to discourage democratization and promote class conflict and revolution in dictatorships. Most such arguments crucially assume that ordinary people know how high inequality is, how it has been changing, and where they fit in the income distribution. Using a variety of large, cross‐national surveys, we show that, in recent years, ordinary people have had little idea about such things. What they think they know is often wrong. Widespread ignorance and misperceptions emerge robustly, regardless of data source, operationalization, and measurement method. Moreover, perceived inequality—not the actual level—correlates strongly with demand for redistribution and reported conflict between rich and poor. We suggest that most theories about political effects of inequality need to be reframed as theories about effects of perceived inequality.