Perception of inequality is important for the analysis of individuals' motivations and decisions and for policy assessment. Despite the broad range of analytic gains that it grants, our knowledge about measurement and determinants of perception of inequality is still limited, since it is intrinsically unobservable, multidimensional, and essentially contested. Using a novel econometric approach, we study how observable individual characteristics affect the joint distribution of a set of indicators of perceived inequality in specific domains. Using data from the International Social Survey Programme, we shed light on the associations among these indicators and how they are affected by covariates. The approach also gives insights on some results in the literature on inequality. The role of many subjective indicators for the perception of inequality is re‐examined and examples of policy applications are reviewed. The importance of our empirical approach to the measurement of perceived inequality is, in so doing, reinforced.

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Government interventions in the agricultural sector have been historically justified by the existence of an income disparity between farmers and non-farmers. However, recent studies have found that such disparity is disappearing over time, particularly in the United States. This work offers the first longitudinal systematic assessment on the average income disparity between farm and non-farm units in the European Union, differentiating between old and new Member States. Using the EU-SILC dataset, both broad (having some farm income) and narrow (living mainly on agriculture) farm households are compared with a general sample of non-farm households and a more restricted sample of self-employed non-farm households. To control for household observable characteristics and time-constant unobserved factors, we use a fixed effects regression. Results suggest that the farm/non-farm income disparity has disappeared in the European Union unless we compare narrow farm households with all non-farm households: in this case, the former are more likely to be better off than the latter. A limited income disparity is found only in the case of new Member States for broad farm households only. Results are used to draw policy implications regarding the role of CAP in supporting farm income.

The paper compares the income conditions of farm and nonfarm households in the whole EU and within three geographical groups of countries for the period 2008–2016. Overcoming the simple comparison of raw means of the groups, we estimate the farm/nonfarm income differentials by using Regression Adjusted and Covariate Matching techniques, which allow to control for observable characteristics among groups. Three innovative features of our analysis are that we account for the whole income of farm households (i.e. not only farm income), for the presence of in‐kind incomes from self‐consumption of produced goods and imputed rents from properties, and for the complex survey design. We find that an income differential still exists but with relevant differences across countries and along the period. Most of it is due to differences in the households’ characteristics. Hence, comparing raw means of the two groups can be misleading. Nonmonetary sources of income play a not negligible role, improving the relative position of farm households. The role of agricultural and rural policy is discussed in the light of results.