Analysing the link between measured and perceived income inequality in European countries (original) (raw)

Values and norms regarding income inequalities are important in the determination of both primary (pre-tax) incomes and the extent of redistribution through taxes and transfers. This research note, based on the 2009 Special Eurobarometer on poverty and social exclusion, first presents a country-level analysis of the relationship between measured levels of inequality on the one hand and inequality tolerance and redistributive preference on the other hand. It shows that attitudes to inequality differ widely between EU countries and there is a substantial internal variance in most of the countries. It is also shown that inequality tolerance – which is to some extent a proxy for inequality perceptions - do not always correspond to measured income inequality indicators. After testing various inequality and poverty measures, the analysis concludes that country level differences of inequality tolerance is most likely driven by levels of relative poverty. Using both time series and cross sectional analysis, the research note examines how the overall level of income inequality and poverty and a change in these relates to the measured level of acceptance of inequalities. Multivariate analysis shows that inequality attitudes on a personal level are driven by general political attitudes and subjective evaluation of the personal situation of the respondents, rather than by (education or labour market related) socio-economic factors.