preferences is quite limited.<sup>7</sup> Individuals motivated by self-interest mechanically vote for redistribution if they stand to gain from it, and the policy is thus implemented.

Secondly, demand for redistributive policy, even if it were strongly linked to inequality, it would be linked to _subjective_ perceptions of inequality. Individuals base their decisions, such as supporting a more redistributive tax and transfer system, on their perceptions rather than on the objective inequality.<sup>8</sup> This would not be relevant if subjective and objective inequality were the same or, at least, almost fully aligned. However, recent evidence (Gimpelson and Tresiman 2018; Choi 2019; EBRD 2015-17, Cancho, C., et al. 2015, Cancho, C. et al 2015b) shows that there are gaps both in levels and in trends between these two variables. Highlighting the significance of perceptions, Gimpelson and Tresiman (2018, 27) note that “most theories about political effects of inequality [demand for redistribution, the political participation of citizens, democratization] need to be reframed as theories about effects of perceived inequality”.

Discrepancies between measured economic performance (in general, and not only specifically for inequality) and public perceptions had been highlighted in the past (Blendon et al 1997, Slemrod, 2006). However, the sources of these discrepancies have not been a focus of scholarly research of economists. Clark and D’Ambrosio (2015) suggest that perceptions may deviate from objective measures because the concept of inequality that individuals have in mind includes more than just monetary metrics. At the outset of their extensive survey they concede that: “[...] the term inequality is used perhaps rather loosely in the empirical literature. It is of interest to ask which measures of the distribution of income are the most important (to individuals) in this context: Is it (as is commonly assumed) the Gini coefficient, or rather something else?” In here we argue and show empirical evidence that inequality perceptions depend not only on the monetary metrics (individuals might be more worried about the inequalities generated through the labor market than others), but might be influenced by individuals’ attitudes (e.g., self-interest) or ideology.

In contrast with our paper, a common explanation for these discrepancies is that they originate from mistakes of the individuals. Studies on perceptions of inequality have focused on individuals’ (in)ability to correctly perceive inequality (Niehues 2014; Norton & Ariely 2011; Chambers et al., 2014; Kuhn, 2015; Page and Goldstein 2016) or, correspondingly, their own position within the income distribution (Cruces et al 2013; Fernandez-Albertos & Kuo 2015; Karadja et al.2017). There is, however, an exception to the dismissal of subjective data: expectations. These are clearly subjective and play an important role in

> 7 As noted above, these preferences tend to be more complex than earlier literature assumed. In this paper, we focus on these preferences and their link with perceptions of inequality, and we are not concerned about the link between these preferences and the final policy outcomes. In modern democracies, as a large literature has established (see Page and Shapiro 1983, Burstein 2003), majority preferences do influence policy outcomes. Similarly, Luebker (2014) shows that redistributive preferences translate into redistributive outcomes.

> 8 Gruendler and Koellner (2017) confirm that actual inequality increases redistribution (measured as the difference between market and net Gini coefficient), however, they find an even stronger link between perceived inequality and redistribution.

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