Researchers have found that people tend to underestimate the income of the world’s richest individuals. This bias, known as “scope insensitivity,” makes people less aware of specific amounts and instead categorizes them as “rich.” As a result, they may not accurately perceive the significant wealth held by the top 1% of earners.
A study published in PNAS Nexus found that participants underestimated the minimum annual household income thresholds for the top 1% of American earners. This bias was also observed when participants were shown photos and income figures for members of a fictional society, with underestimation occurring when wealth was concentrated at the top end of the income distribution.
The study suggests that this selective insensitivity to income held by the richest could be contributing to a lack of support for policies aimed at redistributing wealth. In the United States, for example, support for such policies has remained stagnant since the 1970s despite the share of incomes held by the top 1% jumping from 10% to 19%.
The findings highlight the importance of understanding how people perceive income inequality and the need for more accurate representation of wealth distribution.
Source: https://phys.org/news/2024-09-people-underestimate-income.html