Using contextual measures to capture citizens’ perception of inequality in their surrounding environment

Abstract A growing literature explores the effect of economic inequality in citizens’ surrounding environment on their political attitudes and behavior. This literature typically relies on measures of income concentration or gap-size, which reflect under-tested presumptions about how citizens perceive the economic conditions surrounding them. Utilizing survey data to explore perception of economic inequality in Americans’ residential environment, this note finds that measures capturing income concentration or gap-size perform poorly relative to a measure capturing the joint prevalence of “haves” and “have-nots.” These results suggest that commonly used measures of economic inequality may not fully capture the features of people’s daily environment used to perceive the existence or magnitude of inequality. The results guide future research toward using contextual indicators that treat inequality as a compound phenomenon involving manifestations of poverty and affluence.