In the second step, we use equation (4) as the regression specification and replace the economic context variables (unemployment rate, the objective Gini index, the poverty headcount rate, and the intergenerational elasticity of education) with individuals’ reported inequality perceptions. As expected, and in line with Gimpelson and Treisman (2018), the correlation between perceptions of inequality and demand for redistribution shown in Table 3b is positive and precisely estimated. An increase from a perceived Gini index equal to 20 (country Type D) to 42 (country Type A) is equal to a change in the demand for redistribution of 0.44 (0.02*22) on a 1 to 5 scale (or 38% of a one standard deviation). This coefficient is robust to including political ideology as and additional control (column 2) which also shows that the more to the right, the less strong is demand for redistribution. Interacting inequality perceptions with ideology reduces the coefficient to 0.004 for those on the farthest left, but it increases it twice (0.04) for those on the far right, although the coefficient of perceived Gini index loses all precision when we introduce its interaction with political ideology. This suggests that inequality perceptions exert an indirect effect on demand for redistribution through ideology. In fact, those on the left of the ideology spectrum seem more insensitive to their inequality perceptions when forming their demand for redistribution. It seems as if individuals on the left have a strong demand for redistribution irrespective of the actual level of inequality they perceive, and that only individuals on the right vary their demand for redistribution as their perceptions of inequality change.

The results in the last specification (column 4) use the proxy variable for political ideology that allows us to include many more observations. The results are consistent and the demand for redistribution of those individuals more to the left (in this case, those that consider that the need to support a family is essential to determine people’s wages) is in fact very little sensitive to inequality perceptions.

<u>Table 3b – Demand for redistribution, perceptions of equality and ideology</u>

|<br>Dep. Var: Demand for redistribution|<br>(1)|<br>(2)|<br>(3)|<br>(4)|
|---|---|---|---|---|
|Equality perceptions (Gini index equivalent)|0.020<sup>***</sup><br>(0.002)<br>_[0.01]_<sup>***</sup>|0.022<sup>***</sup><br>(0.002)<br>_[0.01]_<sup>***</sup>|-0.005<br>(0.004)|0.005<sup>*</sup><br>(0.003)|
|Left-right ideology (1 = far left, 5=far right)||-0.245<sup>***</sup><br>(0.033)<br>_[0.01]_<sup>***</sup>|-0.519<sup>***</sup><br>(0.042)<br>_[0.01]_<sup>***</sup><br>||
|Left-right ideology X Equality perceptions (Gini<br>index equivalent)|||0.009<sup>***</sup><br>(0.001)<br>_[0.01]_<sup>***</sup>||
|In deciding how much people ought to earn, how<br>important should be what is needed to support a||||-0.359<sup>***</sup><br>(0.023)<br>|
|family? (1: essential – 5: not important at all)||||_[0.01]_<sup>***</sup>|
|Importance of family support X Equality<br>perceptions (Gini index equivalent)||||0.005<sup>***</sup><br>(0.001)<br>_[0.01]_<sup>***</sup>|
|Age: reference group, born after 1970|||||
|Born between 1946-1970|0.020<br>|0.008<br>|-0.006<br>|0.041<sup>**</sup><br>|
||(0.018)|(0.017)|(0.016)|(0.018)|

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