Income, Perceptions of Inequality and Support for Redistribution: An Information Provision Experiment in the UK

Abstract

Inequality matters for preference formation. We know from previous literature that: (1) it matters most for the rich and less for the poor who always gain from redistribution irrespective of the level of inequality; and (2) perceptions are an important mediator for preference formation. Given that the rich respond more to differences in inequality, we would also expect the effect of perceptions to be most prevalent among the rich. In this paper, we do two things. First, we assess observationally with ISSP data whether income mediates the relationship between perception and preference. We then conduct a survey experiment to explore causal links. We manipulate perceptions by providing pessimistic information on the true level of inequality and update people’s beliefs. We show that information about high levels of inequality makes the poor more homogeneously supportive of redistribution, and that it increases the variation of support for redistribution among the rich. We also show that fairness beliefs matter for the perception-preference link among the rich.