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. 2017;134(3):877-898.
doi: 10.1007/s11205-016-1460-9. Epub 2016 Oct 3.

Who are Your Joneses? Socio-Specific Income Inequality and Trust

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Who are Your Joneses? Socio-Specific Income Inequality and Trust

Fabian Stephany. Soc Indic Res. 2017.

Abstract

Trust is a good approach to explain the functioning of markets, institutions or society as a whole. It is a key element in almost every commercial transaction over time and might be one of the main explanations of economic success and development. Trust diminishes the more we perceive others to have economically different living realities. In most of the relevant contributions, scholars have taken a macro perspective on the inequality-trust linkage, with an aggregation of both trust and inequality on a country level. However, patterns of within-country inequality and possibly influential determinants, such as perception and socioeconomic reference, remained undetected. This paper offers the opportunity to look at the interplay between inequality and trust at a more refined level. A measure of (generalized) trust emerges from ESS 5 survey which asks "...generally speaking, would you say that most people can be trusted, or that you can't be too careful in dealing with people?". With the use of 2009 EU-SILC data, measurements of income inequality are developed for age-specific groups of society in 22 countries. A sizable variation in inequality measures can be noticed. Even in low inequality countries, like Sweden, income imbalances within certain age groups have the potential to undermine social trust.

Keywords: Income inequality; Perception; Stratification; Trust.

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Figures

Fig. 1
Fig. 1
Gini versus own calculations: the official inequality measures and own calculations of Gini coincide. Source EU-SILC 2009, ESS 5, and own calculations
Fig. 2
Fig. 2
Illustration of model: the three-dimnesional model segregates the sample into macro- (countries), mezzo- (age groups), and micro-levels (individuals), which are nested within each other. Source EU-SILC 2009, ESS 5, and own calculations
Fig. 3
Fig. 3
Distribution of Trust Across Countries: the distribution of generalized trust across countries suggests an ordinal logit model environment. Source EU-SILC 2009, ESS 5, and own calculations
Fig. 4
Fig. 4
Age group Ginis for three selected countries: the example of Sweden, Germany, and Bulgaria shows that age-specific imbalances remain undetected by national measures of inequality. Source EU-SILC 2009, ESS 5, and own calculations
Fig. 5
Fig. 5
Gini coefficients ordered by national Gini: for countries with higher levels of inequality, dispersion along age and educational groups seems to be larger. Source EU-SILC 2009, ESS 5, and own calculations
Fig. 6
Fig. 6
Gini coefficients ordered by national trust: anegative association between inequality and trust becomes apparent. Source EU-SILC 2009, ESS 5, and own calculations

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