The Misestimation of Urban-Rural Income Inequality in China

Despite the challenge of income and wealth inequality around the world, people tend to underestimate the degree of inequality in their societies. In this research, we examine how people estimate inequality at subnational scales by focusing on urban-rural income inequality in China, a society characterized by a unique dual urban-rural social structure but that is also facing a steep increase in income inequality. Using a nationwide sample of Chinese adults (N = 953), we found that Chinese participants tend to underestimate the level of urban-rural income inequality while overestimating the progress made toward its reduction. System-justifying ideologies were found to be negatively associated with support for redistributive policies, with the underestimation of the level of urban-rural income inequality mediating this association. These findings highlight that Chinese people vastly underestimate the actual levels of urban-rural income inequality, which shapes their attitudes toward redistributive policies.