A Network-Based Explanation of Perceived Inequality

Faculty/Professorship: International Economics  ; Political Theory  
Author(s): Schulz, Jan  ; Mayerhoffer, Daniel  ; Gebhard, Anna
Publisher Information: Bamberg : Otto-Friedrich-Universität
Year of publication: 2021
Pages: 37
Series ; Volume: Bamberger Beiträge zur Modernen Politischen Theorie ; 2 
Language(s): English
DOI: 10.20378/irb-49393
Licence: Creative Commons - CC BY-ND - Attribution - NoDerivatives 4.0 International 
URN: urn:nbn:de:bvb:473-irb-493931
Across income groups and countries, the public perception of economic inequality and many other macroeconomic variables such as inflation or unemployment rates is spectacularly wrong. These misperceptions have far-reaching consequences, as it is perceived inequality, not actual inequality informing redistributive preferences. The prevalence of this phenomenon is independent of social class and welfare regime, which suggests the existence of a common mechanism behind public perceptions. We propose a network-based explanation of perceived inequality building on recent advances in random geometric graph theory. The literature has identified several stylised facts on how individual perceptions respond to actual inequality and how these biases vary systematically along the income distribution. Our generating mechanism can replicate all of them simultaneously. It also produces social networks that exhibit salient features of real-world networks; namely, they cannot be statistically distinguished from small-world networks, testifying to the robustness of our approach. Our results, therefore, suggest that homophilic segregation is a promising candidate to explain inequality perceptions with strong implications for theories of consumption behaviour.
GND Keywords: Soziale Ungleichheit ; Einkommensdisparität ; Personelle Vermögensverteilung ; Wahrnehmung ; Soziale Homophilie
Keywords: homophily, network, inequality, perception, random geometric graph
DDC Classification: 300 Social sciences, sociology & anthropology  
RVK Classification: MS 1300   
Type: Workingpaper
URI: https://fis.uni-bamberg.de/handle/uniba/49393
Release Date: 8. March 2021
Project: Politische Epistemologie: Demokratie und das Problem strategischer Manipulation

File Description SizeFormat  
fisba49393.pdf1.42 MBPDFView/Open