Perceived Social Position and Objective Inequality: Do They Move Together? Evidence from Europe and the United States

Abstract

According to the literature on social class analysis, both subjective and objective dimensions should be considered, since the perception of social position can influence economic behaviour and choices. The aim of this paper is to investigate objective and perceived social position inequality in six different countries from the 1990s to the 2000s in order to find out whether these dimensions move together or are independent from each other. The results suggest that people perceive themselves as more similar/dissimilar to other members of society than what income-based and other objective aspects show. In particular, considering the whole sample, evidence of an increasing income distance between social groups is found, while we observe no increase in inequality in perceptions when controlling individual characteristics. Consequently, the dynamics of perceptions can help explain, for example, the empirical evidence regarding the lack of reaction to the rise of economic disparities and the general emulative consumption behaviours associated with increasing inequality detected in some countries.