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Misperceptions: An Analysis of Subjective Economic Inequality

In: Inequality, Taxation and Intergenerational Transmission

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  • Aboozar Hadavand

Abstract

This chapter focuses on an important aspect of economic inequality – the question of how people perceive inequality and whether these perceptions deviate in any meaningful way from statistical measures of inequality. Using a novel approach, the author investigates whether individuals across different countries are able to correctly estimate the shape of income distribution of the country where they reside. The author further investigates whether individuals have the distribution of a particular reference group in mind when they answer questions on inequality. The author finds that perceptions of inequality are frequently shaped by reference groups such as those formed according to educational attainment, age, and gender.

Suggested Citation

  • Aboozar Hadavand, 2018. "Misperceptions: An Analysis of Subjective Economic Inequality," Research on Economic Inequality, in: Inequality, Taxation and Intergenerational Transmission, volume 26, pages 247-281, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:reinzz:s1049-258520180000026011
    DOI: 10.1108/S1049-258520180000026011
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    Cited by:

    1. 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.

    More about this item

    Keywords

    Income Inequality; Subjective Inequality; Perception; Reference Groups; Inequality Measurement; Gini Coefficient; D31; D83; D63; I30;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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