New research from the University at Buffalo’s School of Management shows that what people believe—and where they live—shapes how much economic inequality they think they see. People who trust that socioeconomic systems are fair, and those who live or work in areas where the rich and poor are separated, tend to notice less inequality than those who question the system’s fairness or live in mixed-income areas.

Even when shown identical levels of inequality in controlled settings, personal beliefs and geographical separation play a major role in how much inequality people report. To dig into what drives these perceptions, researchers conducted eight surveys with over 4,000 participants, looking at the beliefs and environmental factors that shape attitudes toward income differences. In a separate study, they analyzed over 20 years of survey data and spoke with more than 2,000 people to explore how economic segregation affects people’s view of inequality.

Lack of understanding

The findings point to a problem: while income gaps have grown, many people still underestimate how wide these gaps are. This underestimation, the research suggests, may come from personal beliefs and whether people see others of different economic backgrounds. In turn, how much people care about tackling inequality depends on how clearly they see it.

For example, people who see the system as fair view income gaps as smaller, making them less likely to back policies like tax reform, healthcare support, minimum wage increases, or limits on executive pay. Those in economically separated areas also tend to see less inequality, which often leads to more positive views of the status quo and weaker support for government action.

The study offers a reminder that tackling inequality requires not just policy changes, but also an understanding of the mental lenses through which people see their world.