Does self-perceptions and income inequality match?

This paper examines subjective social status to test whether individual comparisons are driven by income and wealth, or social and cultural capital as defined by Bourdieu. The empirical analysis uses a cross-sectional data set of 18 European countries and a mixed model with an MCMC estimation method. The results show that material factors are just as important as non-material factors. Besides income and wealth, other dimensions of inequality including education, occupational prestige, parental background and working status are important factors to explain the gap between the income distribution and subjective social status. The most relevant institutions to explain the cross-country differences within Europe are the GDP level, average health and the education system, which also moderates the relevance of wealth on subjective social status.