| >The average American believes that the richest fifth own 59% of the wealth and that the bottom 40% own 9%. The reality is strikingly different. The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%. The Walton family, for example, has more wealth than 42% of American families combined. >We don’t want to live like this. In our ideal distribution, the top quintile owns 32% and the bottom two quintiles own 25%. As the journalist Chrystia Freeland put it, “Americans actually live in Russia, although they think they live in Sweden. And they would like to live on a kibbutz.” Norton and Ariely found a surprising level of consensus: everyone — even Republicans and the wealthy—wants a more equal distribution of wealth than the status quo. You'd think they'd sanity check their poetic description against professed beliefs. If your metric says that most Americans "would like to live on a kibbutz", then your metric is wrong. What this actually shows is that most Americans have no idea what wealth inequality looks like. Ask the same group of people their predicted and ideal income inequality measurements. I predict you'll get the same numbers, plus a little noise. A closely related question: is asking in terms of percentages biasing? And the answer is: Very Yes. http://journal.sjdm.org/12/121027/jdm121027.html >Norton and Ariely (2011) set out to answer a remarkably important set of questions: How much inequality do ordinary Americans believe exists in the U.S.? And how much inequality do they desire? These questions have a range of important policy implications. However, the initial answers to these questions need to be reconsidered. Our findings indicate that the remarkably low estimates of wealth inequality given by Norton and Ariely’s respondents depended on the particular measure (quintile percentages) that was used. When asked to state quintile percentages for either household wealth, teacher salaries, or web page clicks, our respondents seemed to use an anchoring-and-adjustment heuristic leading to very similar responses across very different domains. >When respondents were relieved of aggregating their intuitions about inequality into quintile percentages, another picture emerged. According to this new picture, Americans do not tend to have extremely biased perceptions of current levels of inequality. Nor do they entertain an ideal of near-perfect egalitarianism. Rather they seem to prefer a world where the poor are not as poor as they are today. Further investigation into this more tractable ideal might provide a basis for workable policy prescriptions. |