Latin American Middle Classes: The Distance between Perception and Reality

Economia - The Journal of the Latin American and Caribbean Economic Association, 14(1), 33-60. Washington, DC: Brookings Institution Press, 2013

Posted: 3 Mar 2017

See all articles by Eduardo A. Lora

Eduardo A. Lora

Inter-American Development Bank (IDB) - Research Department

Johanna Fajardo-Gonzalez

Independent Researcher

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Date Written: October 2013

Abstract

This paper aims to understand why and by how much perceptions of social ranking differ from objective rankings based on self-reported income. It focuses on the middle class because persons of all income levels show a strong bias towards identifying themselves as middle class. Using a rich database for 16 Latin American countries, the empirical analysis finds that the distance between perception and objective social ranking is large, and that perceived social ranking is associated not just with income, but with all forms of wealth, be it personal capabilities, interpersonal relations, financial and material assets, and perceptions of economic insecurity.

Keywords: Middle class, Social status, Income distribution, Latin America

JEL Classification: D3, I3, D6

Suggested Citation

Lora, Eduardo A. and Fajardo-Gonzalez, Johanna, Latin American Middle Classes: The Distance between Perception and Reality (October 2013). Economia - The Journal of the Latin American and Caribbean Economic Association, 14(1), 33-60. Washington, DC: Brookings Institution Press, 2013, Available at SSRN: https://ssrn.com/abstract=2925436

Eduardo A. Lora

Inter-American Development Bank (IDB) - Research Department ( email )

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