Attitudes Toward Economic Inequality: The Illusory Agreement

Abstract

Recent studies of attitudes toward economic inequality suggest that most people around the world prefer very low levels of inequality, despite well-known trends toward greater inequality within many countries. Even within countries, people across the political spectrum are said to be in remarkable agreement about the ideal level of economic inequality. Using survey data from 40 countries and a novel survey experiment in the United States, we show that this apparent agreement is illusory. When relying on a widely used cross-national survey measure of Ideal Pay Ratios, preferred levels of inequality are heavily influenced by two well-documented sources of perceptual distortion: the anchoring effect and ratio bias. These effects are substantial and many times larger than the influence of fundamental political predispositions. As a result, these cross-national survey measures tapping preferences regarding economic inequality produce misleading conclusions about desired levels of inequality.

Attitudes on the Size of Unemployment Benefits: Ideology and Numbers

“…Recently, Pedersen () demonstrated that unit effects may also affect people’s attitudes within the domain of politics. Similar to the temporal reframing used by Gourville, this study shows that people are less likely to accept a tax increase of US$420 per year than a – logically equivalent – tax increase of US$35 per month (Pedersen ; see also Pedersen & Mutz ).…”

“…Within cognitive psychology, Yamagishi () found, for example, that people perceived a disease to be riskier when the mortality rate was described as ‘1,286 out of 10,000 people’ than when it was described as killing ‘24.14 out of 100 people’. In general, unit effects seem to be a highly general phenomenon across domains (Denes‐Raj et al ; Pedersen & Mutz ). Recently, Pedersen () demonstrated that unit effects may also affect people’s attitudes within the domain of politics.…”

“…Following Tversky and Kahneman (), studies of anchoring have mostly investigated how anchoring affects subjective judgments of facts rather than preferences (Ariely et al ). Recent studies have, however, also demonstrated that anchoring works not only when people are asked to estimate what a factual number is , but also when asked to provide a normative assessment of what a given number should be – for example, anchoring influences willingness to pay (Loschelder et al ), retirement savings (Choi et al ), and attitudes on income inequality (Pedersen & Mutz ). Furthermore, while earlier anchoring studies focused almost exclusively on the effect of random numbers (e.g., Tversky & Kahneman ), more recent studies have often investigated the effects of non‐random anchor values (Thaler & Sunstein ; Zhao & Linderholm ; Loschelder et al ; Beshears et al ).…”

The Vicious Cycle of Economic Inequality: The Role of Ideology in Shaping the Relationship Between “What Is” and “What Ought to Be” in 41 Countries

“…The relationship between perceived and desired inequality may be due to heuristic processes, so that people anchor their responses on the current information available in their more immediate context (Tversky & Kahneman, 1974). For instance, people who were provided information about actual income inequality used it as an anchor to estimate the desired levels of inequality (Pedersen & Mutz, 2018). However, there is also evidence that supports a motivational component that leads people to justify their status quo (Jost & Banaji, 1994; van der Toorn & Jost, 2014).…”

Citizen Attitudes on Politicians’ Pay: Trust Issues Are Not Solved by Delegation

“… 1. Pedersen and Mutz (2018) have shown that survey measures of pay preferences are highly affected by anchoring effects and ratio bias. These problems with the measures do not, however, undermine the finding that people would generally prefer to adjust the pay of politicians downward. …”