Latin American Middle Classes : The Distance between Perception and Reality

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