Who Supports Redistribution? Subjective Income Inequality in Japan and China

Stephen Tay

Economic and Political Studies, 2015, vol. 3, issue 2, 30-59

Abstract: Governments reduce income inequality with redistribution policies. These policies are often contentious because people who live in the same country have different preferences for redistribution. Some prefer the government to do more while others prefer the government to do less. Hence what explains the difference in preferences? Using the methodologically suitable cases of Japan and China, this paper contributes to the redistributive preference literature by proposing an alternative theory of how a person’s subjective evaluation of and experiences with income inequality—subjective income inequality—affect his/her redistributive preferences. Specifically, a person who feels that his/her country’s level of income inequality is too high is more likely to support government redistribution. But contrary to extant studies, this paper finds that a spatial locality’s level of objective income inequality does not systematically affect its citizens’ preference for redistribution. This finding has implications for redistribution policies because government policies in Japan and China—as with other countries—narrowly frame income inequality in the objective dimensions by pegging it to “objective” income inequality indices (e.g., Gini ratio), thereby ignoring the more important subjective dimensions of income inequality.

Date: 2015
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DOI: 10.1080/20954816.2015.11673830

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