Local versus National: The effect of correcting incomemisperceptions on inequality perceptions and political preferences

Theories of democratic responsiveness assume citizens can accurately assess their economic standing, yet research consistently shows widespread misperceptions. People are notoriously bad at estimating their position in the national income distribution; the majority tend to place themselves in and around the middle of the national income distribution, irrespective of whether they are actually rich or poor. However, national income distributions can mask huge local-level variation. In light of new evidence that suggests people anchor to more immediate reference groups, we investigate whether people have more accurate perceptions of where they sit in the local income distribution and whether local income corrections induce greater change in perceptions and preferences. Using a novel survey experiment in the United States, we address the following questions: 1) are people any better at placing their household in the local income distribution? and 2) do local income corrections have a larger effect on political preferences and social beliefs than national income corrections? We first ask respondents to place their household within the local (county) and national income distributions and subsequently inform one group of treated respondents of their true position in the local income distribution and another of their position in the national distribution. We then compare the responses of those treated with an income shock to the control group who receive neither correction nor confirmation. With this approach, we test the effect of being informed that one is i) richer or ii) poorer than thought at the local and national level. Our results show that perceptions of household position within the local and national income distributions are equally inaccurate, with respondents defaulting to the middle rung of the ladder at both scales. Though not uniformly stronger, local corrections produce more consistent effects than national ones on outcomes like meritocratic beliefs and support for redistribution. We also show that local and national corrections cause substantial changes in how individuals perceive their own financial wellbeing, but do not affect perceptions of how others are faring. In short, income corrections do not necessarily prompt reconsiderations of inequality or hardship in broader society. As one of the first causal comparisons of national versus local income corrections, this study offers new insights into the spatial mechanisms by which correcting misperceptions reshapes attitudes and challenges the received wisdom that the national context is the natural or default reference group.