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A common assumption in the literature is that the level of income inequalityshapes individuals' beliefs about whether the income distribution is fair(``fairness views,'' for short). However, individuals do not directly observeincome inequality (which often leads to large misperceptions), nor do theyconsider all inequities to be unfair. In this paper, we empirically assess thelink between objective measures of income inequality and fairness views in acontext of high but decreasing income inequality. We combine opinion poll datawith harmonized data from household surveys of 18 Latin American countries from1997--2015. We report three main findings. First, we find a strong andstatistically significant relationship between income inequality and unfairnessviews across countries and over time. Unfairness views evolved in the samedirection as income inequality for 17 out of the 18 countries in our sample.Second, individuals who are older, unemployed, and left-wing are, on average,more likely to perceive the income distribution as very unfair. Third, fairnessviews and income inequality have predictive power for individuals'self-reported propensity to mobilize and protest independent of each other,suggesting that these two variables capture different channels through whichchanges in the income distribution can affect social unrest.

Are Fairness Perceptions Shaped by Income Inequality? Evidence from Latin America