Perceiving economic inequality in everyday life decreases tolerance to inequality

Highlights

• A manipulation of perceived economic inequality in everyday life is presented.

• Perceived Inequality in Everyday Life (PEIEL) increases intolerance to inequality.

• PEIEL predicts intolerance controlling for other measures of perceived inequality.

• A mini meta-analysis corroborated these results.

• PEIEL may be a useful tool to understand the consequences of economic inequality.

Abstract

Economic inequality is one of the main issues of modern societies, and one of the ways to reduce it is through decreasing inequality tolerance and increasing support for economic redistribution. However, there are no consistent results in previous research about the relationship between perceived economic inequality, tolerance to inequality, and support for redistributive policies. In this paper, we argue that rather than measuring the effects of abstract perceived inequality (e.g., measured at the country level), it is important to consider Perceived Economic Inequality in Everyday Life (PEIEL) and close relationships. In one correlational study (N = 207) we found that a PEIEL scale predicts intolerance toward inequality controlling for the common measures of perceived inequality. Moreover, we developed a novel manipulation which was validated in a pilot study (N = 293), and in four experimental studies (N = 261; N = 373; N = 289, N = 289), we found that PEIEL decreases tolerance to inequality. Furthermore, we found a preliminary indirect effect of PEIEL on attitudes toward redistribution through intolerance to inequality. A mini meta-analysis using political ideology, social class, sex, and age as covariates, corroborated these results. All studies were preregistered. In short, these results highlight the importance of perceived inequality in everyday life as an additional tool when considering the psychosocial effects of economic inequality.

Introduction

Economic inequality is one of the main issues of current societies (Wilkinson & Pickett, 2017; World Economic Forum, 2017). In the last three decades, the global top 1% of the world population increased their income twice as much as the 50% poorest segment (Alvaredo, Chancel, Piketty, Saez, & Zucman, 2017). In Spain, the context of the current study, inequality has increased significantly in the last years, and it is now one of the most unequal countries in the European Union (EUROSTAT, 2018).

One of the main ways to reduce economic inequality—and to stop its progression—is through redistribution (Atkinson, 2015). But is economic inequality perception enough to change tolerance to inequality? Do people have positive attitudes toward redistribution? Previous research has shown that living in highly unequal contexts does not have a straightforward impact on such attitudes, and it has instead highlighted the importance of considering perception and experience (Brown-Iannuzzi, Lundberg, Kay, & Payne, 2015; Choi, 2019; García-Sánchez et al., 2018; Gimpelson & Treisman, 2018; Wright, 2018).

The literature posits that the subjectively perceived economic inequality produces greater psychosocial impact on attitudes toward inequality than objective economic inequality (Bobzien, 2019; Choi, 2019; Evans & Kelley, 2018; Loveless, 2013). However, the findings regarding the relationship between perceiving economic inequality, tolerance to inequality, and support for redistributive policies are inconclusive (García-Sánchez, Willis, Rodríguez-Bailón, Palacio, et al., 2018; Wright, 2018). Researchers have pointed out that these inconclusive results might be due to different factors. The actual economic inequality could act as a cognitive anchor used to estimate the ideal world (García-Sánchez, Willis, Rodríguez-Bailón, Palacio, et al., 2018; Trump, 2018). Thus, although people tend to reject inequality, in countries with greater inequality, they also tend to tolerate it more (Boudreau & MacKenzie, 2018; Castillo, Miranda, & Carrasco, 2012). Additionally, people have a poor understanding of how inequality works, and they do not know how redistributive policies can alleviate it (Brown-Iannuzzi et al., 2015; Kuziemko, Norton, Saez, & Stantcheva, 2015).

In this article, we argue that one way to change tolerance to inequality and attitudes toward redistribution is to get people to pay attention to the economic inequality they experience in their everyday lives. Building on the literature showing that the immediate context has a greater influence on individuals' attitudes than national aggregates (Franko, 2016; Newman & Hayes, 2019; Newman & Kane, 2017), and that social sampling process affects the perception and attitudes toward inequality (Dawtry, Sutton, & Sibley, 2015; Dawtry, Sutton, & Sibley, 2019), we propose that when people experience high inequality in their daily experiences, they tend to have worse attitudes toward inequality and to be more prone to redistribution.

Perceived Economic Inequality in Everyday Life (PEIEL) are the daily experiences in which individuals perceive differences in the way resources are distributed between the members of a society (García-Castro, Willis, & Rodríguez-Bailón, 2019). From this perspective, experience is the basis on which individuals evaluate inequality (Ignácz, 2018).

People tend to get information about wealth distribution from their own experience and the experiences of people with whom they interact in their daily lives. This is explained by the accessibility heuristic, a systematic perceptual bias, under which individuals form their impressions about the economy from their close social circles (Evans & Kelley, 2017; Flanagan & Kornbluh, 2017). These social circles are not representative of society and create systematic differences in the perception and experience of inequality. The information extracted from closer social relations is generalized to the whole society (Brown-Iannuzzi et al., 2015; Cruces, Perez-Truglia, & Tetaz, 2013). As such, it has been found that social sampling processes influence political attitudes toward poor and wealthy people (Dawtry et al., 2015).

Economic inequality is not always considered intolerable or undesirable. The extent to which it is tolerated depends on the perception people have of it (Han, Janmaat, Hoskins, & Green, 2012; LA Roex, Huijts, & Sieben, 2019). In fact, some people not only tolerate inequality but also prefer some relative inequality (Arsenio, 2018; Son Hing, Wilson, Gourevitch, English, & Sin, 2019). Until now, it has not been clear what the relationship between tolerance toward inequality and perceived economic inequality is. However, most studies have found a negative relationship between these two factors (Castillo et al., 2012; Kuhn, 2019). Despite these findings, the opposite has also been suggested in previous research (Loveless, 2013; Trump, 2018). In a previous study, measuring perceived inequality based on the closest context, PEIEL positively predicted intolerance toward inequality over and above the most popular measures of general perception of inequality used in the literature (García-Castro et al., 2019).

Moreover, attitudes toward inequality and redistribution are influenced by the perception of economic inequality in everyday life too (Bailey, Gannon, Kearns, Livingston, & Leyland, 2013). It has already been shown that reference groups affect attitudes toward redistributive policies (Cruces et al., 2013; Newman, 2014). For example, people support more redistributive policies when they make more economic comparisons between people (Clark & Senik, 2010; Senik, 2009), when one of their friends has economic problems (Newman, 2014), and when they are in contact with the unemployed (Franko, 2016). Furthermore, individuals who live in more unequal contexts tend to vote for senators who support more redistributive policies (Newman & Hayes, 2019).

The Meltzer-Richard model proposed that economic inequality would make people demand greater redistribution. However, so far, its results are not conclusive (Choi, 2019; García-Sánchez, Willis, Rodríguez-Bailón, Palacio, et al., 2018). As an extension of this model, it has been theoretically proposed that it is not just objective economic inequality but its subjective perception which may lead to a greater demand toward redistribution (Choi, 2019; Son Hing et al., 2019). Although the effect of perceived economic inequality, in support for redistributive policies, may not be lineal (Choi, 2019; Norton & Ariely, 2011). It has also been proposed that perceived economic inequality would make people care more about inequality, and that, in turn, would make them support more redistributive policies (Choi, 2019; Son Hing et al., 2019). Nonetheless, as far as we know, the indirect path of perceived economic inequality influencing attitudes toward redistribution through intolerance to inequality has not been empirically tested.

In this paper, we aimed to increase what we know about the relationship between perceived economic inequality, tolerance to inequality and attitudes toward redistribution in at least three ways. First, perceived inequality has been commonly assessed abstractly, bearing little relation to the ways in which people estimate the inequality within the context in which they live (García-Sánchez et al., 2018). Hence, we aimed to deepen the research on inequality in a more direct and meaningful way, through the inequality that individuals experience in their daily lives. For instance, we used a scale that measures salient experiences of inequality in everyday life, and how individuals perceive inequality in their close social circle (García-Castro et al., 2019). Second, although previous researchers have already examined the relationship between PEIEL and tolerance to inequality (García-Castro et al., 2019), no experimental research has been conducted to examine the causal direction of this effect. Finally, the possible relationship between the perception of economic inequality and attitudes toward redistribution mediated by intolerance to inequality has not yet been empirically examined. We therefore conducted four preregistered experimental studies to fulfill this gap.

Evidently, the perception of economic inequality is not the only variable that affects tolerance to inequality and attitudes toward redistribution. Literature has traditionally explained attitudes toward redistribution through personal interest and social values or ideology (Brown-Iannuzzi et al., 2015; García-Sánchez, Van der Toorn, Rodríguez-Bailón, & Willis, 2019; Mijs, 2018; Wu & Chou, 2017), and points out how other variables, like age (Elenbaas, 2019; García-Sánchez et al., 2019), and sex (García-Sánchez et al., 2019; Lierse, 2019), can also have an important influence. We consequently aim to control for these variables when examining the effects of PEIEL.

Summing up, we predicted that PEIEL would increase intolerance toward inequality and, in turn, increase support for redistribution. Specifically, in Study 1, we tested whether measured PEIEL predicts intolerance of inequality and attitudes toward redistribution when controlled for the common measures used in the literature about perceived economic inequality (H1). Then, we validated a novel manipulation of PEIEL in a pilot study. In Study 2, we corroborate the causality of the effects found in study 1 (H2). In Study 3a we ran an experimental direct replication between the PEIEL condition and the control condition (H3a and H3b), and in Study 3b we improve the control condition of equality in daily life used in study 2 and replicate the results (H4a and H4b). Finally, in Study 4, we conceptually replicated the finding using a different experimental manipulation of PEIEL (H5a and H5b). All measures, pre-registrations, hypotheses, data, and results for all the studies can be consulted in the supplemental materials. Sample sizes were determined before any data analysis. (https://osf.io/krx8m/?view_only=069f8366242e4dccb0309ccf89f88324).