Feeling Poor, Feeling Rich, or Feeling Middle-Class : An Empirical Investigation
Based on their objective economic situation and comparing with their peers, individuals form perceptions of their economic position in a society. Data from the three waves of the Life in Transition surveys of European countries show that these perc...
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| Format: | Working Paper |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/939251603805617928/Feeling-Poor-Feeling-Rich-or-Feeling-Middle-Class-An-Empirical-Investigation http://hdl.handle.net/10986/34689 |
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okr-10986-346892022-09-20T00:11:04Z Feeling Poor, Feeling Rich, or Feeling Middle-Class : An Empirical Investigation Bussolo, Maurizio Lebrand, Mathilde Torre, Ivan INEQUALITY SUBJECTIVE RANKING WELL-BEING POVERTY MIDDLE CLASS PERCEPTION INCOME DISTRIBUTION CONSUMPTION Based on their objective economic situation and comparing with their peers, individuals form perceptions of their economic position in a society. Data from the three waves of the Life in Transition surveys of European countries show that these perceptions systematically deviate from the rankings obtained using consumption levels. People position themselves in the middle ranks in larger numbers than those who are in the middle ranks according to their consumption levels. Correspondingly, many people who objectively are classified in the top, richest, or bottom, poorest, ranks subjectively feel that they are in the middle class. This puzzling "bunching in the middle" is the focus of this paper. Explanations are tested and discarded that consider subjective perceptions as misperceptions or the result of other mistakes due to data limitations (such as tail bias). The paper concludes that rather than reflecting a subjective assessment of the distribution of welfare, subjective rankings reveal subjective economic well-being. The paper show that monetary consumption is a strong predictor of subjective economic well-being, but that the latter is influenced by many other factors, including economic security, proxied by employment status or other measures of human capital, such as health and education. These findings have policy relevance, since redistribution measures aiming at simply protecting consumption levels may not be sufficient to restore the economic well-being provided by having full-time secure types of employment. 2020-10-29T13:46:12Z 2020-10-29T13:46:12Z 2020-10 Working Paper http://documents.worldbank.org/curated/en/939251603805617928/Feeling-Poor-Feeling-Rich-or-Feeling-Middle-Class-An-Empirical-Investigation http://hdl.handle.net/10986/34689 English Policy Research Working Paper;No. 9456 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Central Asia Eastern Europe Europe and Central Asia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
INEQUALITY SUBJECTIVE RANKING WELL-BEING POVERTY MIDDLE CLASS PERCEPTION INCOME DISTRIBUTION CONSUMPTION |
| spellingShingle |
INEQUALITY SUBJECTIVE RANKING WELL-BEING POVERTY MIDDLE CLASS PERCEPTION INCOME DISTRIBUTION CONSUMPTION Bussolo, Maurizio Lebrand, Mathilde Torre, Ivan Feeling Poor, Feeling Rich, or Feeling Middle-Class : An Empirical Investigation |
| geographic_facet |
Europe and Central Asia Central Asia Eastern Europe Europe and Central Asia |
| relation |
Policy Research Working Paper;No. 9456 |
| description |
Based on their objective economic
situation and comparing with their peers, individuals form
perceptions of their economic position in a society. Data
from the three waves of the Life in Transition surveys of
European countries show that these perceptions
systematically deviate from the rankings obtained using
consumption levels. People position themselves in the middle
ranks in larger numbers than those who are in the middle
ranks according to their consumption levels.
Correspondingly, many people who objectively are classified
in the top, richest, or bottom, poorest, ranks subjectively
feel that they are in the middle class. This puzzling
"bunching in the middle" is the focus of this
paper. Explanations are tested and discarded that consider
subjective perceptions as misperceptions or the result of
other mistakes due to data limitations (such as tail bias).
The paper concludes that rather than reflecting a subjective
assessment of the distribution of welfare, subjective
rankings reveal subjective economic well-being. The paper
show that monetary consumption is a strong predictor of
subjective economic well-being, but that the latter is
influenced by many other factors, including economic
security, proxied by employment status or other measures of
human capital, such as health and education. These findings
have policy relevance, since redistribution measures aiming
at simply protecting consumption levels may not be
sufficient to restore the economic well-being provided by
having full-time secure types of employment. |
| format |
Working Paper |
| author |
Bussolo, Maurizio Lebrand, Mathilde Torre, Ivan |
| author_facet |
Bussolo, Maurizio Lebrand, Mathilde Torre, Ivan |
| author_sort |
Bussolo, Maurizio |
| title |
Feeling Poor, Feeling Rich, or Feeling Middle-Class : An Empirical Investigation |
| title_short |
Feeling Poor, Feeling Rich, or Feeling Middle-Class : An Empirical Investigation |
| title_full |
Feeling Poor, Feeling Rich, or Feeling Middle-Class : An Empirical Investigation |
| title_fullStr |
Feeling Poor, Feeling Rich, or Feeling Middle-Class : An Empirical Investigation |
| title_full_unstemmed |
Feeling Poor, Feeling Rich, or Feeling Middle-Class : An Empirical Investigation |
| title_sort |
feeling poor, feeling rich, or feeling middle-class : an empirical investigation |
| publisher |
World Bank, Washington, DC |
| publishDate |
2020 |
| url |
http://documents.worldbank.org/curated/en/939251603805617928/Feeling-Poor-Feeling-Rich-or-Feeling-Middle-Class-An-Empirical-Investigation http://hdl.handle.net/10986/34689 |
| _version_ |
1764481441893187584 |