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Biased Perceptions of Income Inequality and Redistribution

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  • Engelhardt, Carina
  • Wagener, Andreas

Abstract

When based on perceived rather than on objective income distributions, the Meltzer-Richards hypothesis and the POUM hypothesis work quite well empirically: there exists a positive link between perceived inequality or perceived upward mobility and the extent of redistribution in democratic regimes though such a link does not exist when objective measures of inequality and social mobility are used. These observations highlight that political preferences and choices might depend more on perceptions than on factual data.

Suggested Citation

  • Engelhardt, Carina & Wagener, Andreas, 2014. "Biased Perceptions of Income Inequality and Redistribution," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100395, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100395
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    References listed on IDEAS

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    1. Roland Benabou & Efe A. Ok, 2001. "Social Mobility and the Demand for Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 447-487.
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    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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