Quote Of The Day

“Three studies examined Americans’ perceptions of incomes and income inequality using a variety of criterion measures. Contrary to recent findings indicating that Americans underestimate wealth inequality, we found that Americans not only overestimated the rise of income inequality over time, but also underestimated average incomes. Thus, economic conditions in America are more favorable than people seem to realize. Furthermore, ideological differences emerged in two of these studies, such that political liberals overestimated the rise of inequality more than political conservatives. Implications of these findings for public policy debates and ideological disagreements are discussed. – Marginal Revolution

6 Responses to “Quote Of The Day”


  • I wonder, did you actually look at the report?

    I didn’t because it’s paid, but I’d be dubious here. For instance your link says that people overestimate what is necessary to qualify as a 1%’er. That’s not surprising. If you just pay attention to headlines you might think the issue is the 1%, but if you actually listen to liberals they frequently make it clear that really the 1% is not so much the issue. The issue is more the top .01%. They use 1% because it’s a convenient slogan, but the reality is the wealth is truly funneling to an extremely tiny minority. Those right at 1% are typically hard working and pay a high proportion of taxes, but the super rich don’t work and pay the lowest tax rates of all.

    The other thing to consider is that this is a discussion of income, not wealth, and wealth is a major factor. Remember that the richest in the world don’t work. They get the money from the work others do and they get that because of property rights. So what they get is not income, but often capital gains. So when you focus on income instead of wealth you focus on something that obscures the share of revenue that’s actually going to the rich. Americans do in fact underestimate the inequality in the wealth distribution. This may partially explain the results of this study you link to. People conflate wealth and income.

    Here’s a video showing how extreme wealth inequality is and how it is much worse than perceptions.

    http://www.youtube.com/watch?v=QPKKQnijnsM

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