Social Positions and Fairness Views on Inequality

Kristoffer B. Hvidberg, Claus Kreiner and Stefanie Stantcheva
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Kristoffer B. Hvidberg: University of Copenhagen

No 21-04, CEBI working paper series from University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI)

Abstract: We link survey data on Danish people's perceived income positions and fairness views on inequality within various reference groups to administrative records on their reference groups, income histories, and life events. People are, on average, wellinformed about the income levels of their reference groups. Yet, lower-ranked respondents in all groups tend to overestimate their own position among others because they believe others incomes are lower than they actually are, whereas the opposite holds true for higher-ranked respondents. Misperceptions of positions in reference groups relate to proximity to other individuals, transparency norms, and visible signals of income. People view inequalities within their co-workers and education groups as significantly more unfair than overall inequality, yet underestimate inequality the most exactly within these groups. Views on the fairness of inequalities are strongly correlated with an individual's current position, move with shocks like unemployment or promotions, and change when experimentally informing people about their actual positions. However, the higher perceived unfairness of income differences within co-workers and education groups stays unchanged. The theoretical framework shows that this can have important implications for redistribution policy.

Keywords: Social position; fairness views; inequality; misperceptions; information experiment; center bias (search for similar items in EconPapers)
JEL-codes: C81 D31 D63 D72 D83 P00 (search for similar items in EconPapers)
Pages: 92
Date: 2021-02-21
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Social Positions and Fairness Views on Inequality (2023)
Working Paper: Social Position and Fairness Views on Inequality (2021)
Working Paper: Social Positions and Fairness Views on Inequality (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kucebi:2104

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