(Perceptions of) Inequality, Demand for Redistribution, and Group-Specific Public Goods
This paper uses data from a survey of 116,061 households in India to study people’s beliefs about inequality and demand for redistribution. The findings show that a household’s beliefs about inequality, implied by the perception of their position on the income distribution, is negatively correlated with support for reducing inequality. This is relevant since there are significant differences between where individuals believe their household stands and their actual position, with the gap between perceived and actual position exceeding two deciles on average. Despite these large differences, informing individuals of their household’s position on the income distribution has no discernible effect on support for reducing inequality. The paper posits that demand for redistribution may be unresponsive to this information because it is based on exclusively on household’s income and does not account for the sharing of resources within communities. In communities where group-specific public goods, such as religious and social goods, are present, class antagonism and redistribution are mitigated by community solidarity. Households benefit from these goods, and such benefits alter the individuals’ beliefs of inequality. Consistent with this prediction, the average individual perceives their household as richer in districts with a greater supply of religious or social goods. The sharing of resources within religious or ethnic groups can shape perceptions of the income distribution and reduce support for redistribution within these groups, and thus requires serious consideration in studies of inequality.
Main Authors: | , |
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Format: | Working Paper biblioteca |
Language: | English English |
Published: |
World Bank, Washington, DC
2023-07-18
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Subjects: | PUBLIC GOODS, COMMUNITY, INEQUALITY, DISTRIBUTION, REDISTRIBUTION, BIASED PERCEPTIONS, PERSONAL WEALTH, |
Online Access: | http://documents.worldbank.org/curated/en/099327306272389793/IDU047e044f00da06048ce09a590f49d3291f051 https://openknowledge.worldbank.org/handle/10986/40021 |
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Summary: | This paper uses data from a survey of
116,061 households in India to study people’s beliefs about
inequality and demand for redistribution. The findings show
that a household’s beliefs about inequality, implied by the
perception of their position on the income distribution, is
negatively correlated with support for reducing inequality.
This is relevant since there are significant differences
between where individuals believe their household stands and
their actual position, with the gap between perceived and
actual position exceeding two deciles on average. Despite
these large differences, informing individuals of their
household’s position on the income distribution has no
discernible effect on support for reducing inequality. The
paper posits that demand for redistribution may be
unresponsive to this information because it is based on
exclusively on household’s income and does not account for
the sharing of resources within communities. In communities
where group-specific public goods, such as religious and
social goods, are present, class antagonism and
redistribution are mitigated by community solidarity.
Households benefit from these goods, and such benefits alter
the individuals’ beliefs of inequality. Consistent with this
prediction, the average individual perceives their household
as richer in districts with a greater supply of religious or
social goods. The sharing of resources within religious or
ethnic groups can shape perceptions of the income
distribution and reduce support for redistribution within
these groups, and thus requires serious consideration in
studies of inequality. |
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