Rob Bray points out to me some interesting data from 1999, in which Peter Saunders (SPRC, UNSW) asked respondents to place themselves in an income decile. Of course, 1/10th of the population falls in each decile, so if people are accurate, then the result should be 10 bars, each containing 1/10th of the population. But here’s what Saunders finds:
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And for those who like decimal points with their data, here are the percentages:
| Decile | % |
| 1 | 1.3 |
| 2 | 4.8 |
| 3 | 14.1 |
| 4 | 23.7 |
| 5 | 25.8 |
| 6 | 15.6 |
| 7 | 10.6 |
| 8 | 3.3 |
| 9 | 0.7 |
| 10 | 0.1 |
In other words, only 1/10th of those in the poorest decile know it, and only 1/100th of the top decile are willing to admit it.
A decade on, it’d be worth seeing whether Australian are any better informed about their true position in the income distribution than we were in 1999.
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Perhaps respondents have their own permanent income in mind, but use the “point-in-time” income distribution in thinking about the cut-points.
“In other words, only 1/10th of those in the poorest decile know it, and only 1/100th of the top decile are willing to admit it.”
In fact, the reverse explanation is also possible — that the top 10 % do not know they in that decile, and the bottom 10% do know but are not willing to admit to it. For most people, knowledge about income is distributed, not common knowledge (in the terminology of epistemic logic).
Not surprising.
This partly explains why a lot of Americans and Europeans think you can close the deficit by taxing the rich. No matter who you are, there are a lot more richer people than you out there.
People also tend to think we spend lots on unemployment benefits and foreign aid, when its very little.
If people had accurate views on key economic statistics, our political debates would look very different.
For political purposes, does income define “class”?