Working Paper
Available upon request
Long-Term Effects of Land Reform on Perceived Income Distribution: Evidence from Peru
We analyze the long-run impact of Peru's agrarian reform on contemporary beliefs about income distribution, using an instrumental variables strategy to identify how historical land redistribution shaped the gap between perceived and actual inequality at the district level.
Abstract
This paper analyzes the impact of Peru's agrarian reform on perceptions of income distribution. Using historical data and household surveys, an instrumental variables approach is employed to identify the causal effect of land redistribution on the gap between perceived and actual economic inequality. The results show that in areas with greater reform intensity, the absolute difference between perception and reality is more pronounced. Specifically, a 1-percentage-point increase in redistributed land reduces perceptual bias by an average of 0.127 points, indicating a tendency to underestimate one's actual position in the income distribution. Transmission mechanisms such as changes in income structure, labor formality, and perceived stability are explored, providing relevant evidence for the design of redistributive policies.