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PsySociety

Blogging At The Intersection Of Psych and Pop Culture

Mind The Gap: Overestimating Income Inequality

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I'm thrilled to be breaking my dissertation-imposed "mini-hiatus" this week with a series of guest posts over at the BPS Research Digest, where I've been asked to take over guest hosting duties for the week and write a few pieces on some recent awesome Social Psych research.

First up -- recent research has given us a lot of talking points about income inequality in the United States, specifically the idea that Americans vastly underestimate the true level of wealth inequality that exists in our country. However, could some of this finding be biased by the fact that people are just plain bad at forming concrete estimates for really tricky, abstract concepts? In a new paper, John Chambers and colleagues address this possible methodological issue by tweaking the way they asked people about wealth (or, rather, income) inequality, and the results might surprise you.

How much money do you think you would have to make each year to land yourself in the infamous One Percent of salary earners?

According to a new study, your answer is very likely to be wrong. Research conducted by John Chambers of St. Louis University and colleagues at the University of Florida reveals that – at least where Americans are concerned – people are actually significantly likely to overestimate how much money is earned by the richest people.

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Chambers and colleagues asked Americans to estimate the percentage of US citizens whose annual incomes fell into three categories: Under $35,000, $35,000-$74,999, and $75,000 or higher. These numbers roughly represent the cutoff points for the bottom, middle, and top third of American earners. Yet, on average, the respondents in this survey greatly overestimated the percentage of Americans who fall into the lowest category (estimating 48 percent) and underestimated the percentage of Americans who fall into the highest category (estimating 23 percent).

 

For the rest of this post, head over to the BPS Research Digest!

 

The views expressed are those of the author and are not necessarily those of Scientific American.

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