Individuals’ socioeconomic position, inequality perceptions, and redistributive preferences in OECD countries

Abstract

The standard model of redistribution posits that attitudes towards redistribution are driven by pure economic self-interest, such as current income. From a social-psychological perspective, however, subjective social status, apart from objective income or social status, is also closely associated with policy preferences. This inquiry directly compares these two different approaches and further explores the role of individuals’ inequality perceptions, including personal norms of inequality to which researchers have paid little attention so far, in shaping individuals’ preferences for redistribution. The current evidence shows that the explanatory power of objective income position is not stronger than that of subjective social position in determining redistributive preferences, while objective social position, which is a summary measure of income, education, and occupation, is more strongly associated with the preferences than perceived social position. The results also demonstrate that individuals’ inequality norms play a more crucial role in the preference formation than does their perceptions of actual inequality. These new findings contribute to redistributive politics and behavioural economics on other-regarding preferences, first, by rebutting the determining role of objective income position in shaping redistributive preferences, as opposed to the basic assumption of the conventional redistribution hypothesis; second, by providing the empirical evidence of the importance of social preferences outside the field of experimental studies.