Two data points and a question:
1. This graph showing the dramatic 80% reduction in the world poverty rate over the last 40 years:
2. This Gapminder survey showing that 95% of Americans asked believe that poverty rates have stayed the same or increased:
The question: What explains the great discrepancy between reality and belief?
Sources:
AEI’s Mark Perry.
Question 8 on this Gapminder survey by Hans Rosling [pdf]. (Via RSE’s Michael Strong.)
See also NBER’s Maxim Pinkovskiy and Xavier Sala-i-Martin’s “Parametric Estimations of the World Distribution of Income”: “We use a parametric method to estimate the income distribution for 191 countries between 1970 and 2006. We estimate the World Distribution of Income and estimate poverty rates, poverty counts and various measures of income inequality and welfare. Using the official $1/day line, we estimate that world poverty rates have fallen by 80% from 0.268 in 1970 to 0.054 in 2006. The corresponding total number of poor has fallen from 403 million in 1970 to 152 million in 2006.”
I would first attribute this discrepancy to the ubiquitous propaganda of the left, which anyone who has went to a government school, attended university, turned on a tv set, or surfed the net has been bombarded with. In this context I refer to the category of leftist propaganda which pushes the class warfare/exploitation/Marxist view of economics.
Secondly, it could be that many people are just spoiled as hell, and the sight of someone with more wealth and money than themselves, compels them to regard themselves as poor. If that many people believe poverty is so widespread, it would be necessary that many of them would regard themselves as living in poverty (or close to it). So it’s an error born from a relativistic judgment rather than one made by reference to any objective standard.