For all the talk about economic inequality, Americans have little grasp of the reality of inequality.
Though confident in their knowledge, few Americans know the extent of income inequality, whether it’s growing or shrinking, or where they fall relative to other Americans, a research brief from the Cato Institute finds.
The ignorance about inequality has interesting implications: a strong correlation exists between the perceived level of inequality and the demand for redistribution. That is, someone who sees a high levels of inequality will want government action, whereas someone who perceives low levels of inequality will be more averse to redistribution.
The research brief was written by Vladimir Gimpelson of the Higher School of Economics and Daniel Treisman of the University of California-Los Angeles and the National Bureau of Economic Research.
Gimpelson and Treisman note that “the implications of these results for theories of redistribution, revolution, and democratization are far-reaching. If these are to be retained at all, they need to be reformulated as theories not about actual inequality but about the consequences of beliefs about it, with no assumption that the two coincide.”
Personal experiences, media consumption, and ideology could drive inaccurate perceptions. Income and wealth inequality are difficult to measure as well, so the lack of a clear, easy-to-understand method for inequality only adds to the confusion.
With a presidential candidate such as Bernie Sanders making income inequality a cornerstone of his campaign, public perception matters. When voters aren’t aware of the reality surrounding inequality, the facts behind the public debate are irrelevant.
