With this in mind, from the total pie of wealth (100%) what percent do you think the bottom 40% (that is, the first two buckets together) of Americans possess? And what about the top 20%? If you guessed around 9% for the bottom and 59% for the top, you're pretty much in line with the average response we got when we asked this question of thousands of Americans.

The reality is quite different. Based on Wolff (2010), the bottom 40% of the population combined has only 0.3% of wealth while the top 20% possesses 84% (see Figure 2). These differences between levels of wealth in society comprise what's called the Gini coefficient, which is one way to quantify inequality.

This is the level of wealth inequality that exists in America, and it is clearly higher than people think, but in Goldilocks-esque fashion, we can ask: Is the real level of inequality too high, too low, or just right? When economists consider the desirable level of inequality, they usually define the ideal inequality from the perspective of economic efficiency: What level of inequality will motivate people to be the most productive and move up the wealth ladder? What level of inequality will allow those at the top to lift up society as a whole (say, by having the resources to invent new technologies)? What level of wealth will keep salaries low and competition high? And so on.

This is one approach to assessing the desirability of wealth inequality, but Mike Norton and I wanted to examine this question from a different perspective--that of regular (non-economist) people--and we wanted to examine inequality in terms of its effect on society as a whole, not just in terms of economic efficiency. After all, inequality is not just about economic efficiency. It's also about our day-to-day experience as citizens, the influence of envy, our social mobility, the importance of equal opportunity, our mutual dependency on each other, etc.

But what does it mean to ask people what level of inequality they want? And how do we get people to respond to such a question without being influenced by their current state of wealth? After all, wouldn't the rich want a higher degree of inequality and the poor want a more even distribution of wealth?

HOW MUCH INEQUALITY DO YOU WANT?

We took a step back and examined social inequality based on the definition that the philosopher John Rawls gave in his book A Theory of Justice. In Rawls' terms, a society is just if a person understands all the conditions within that society and is willing to enter it in a random place (in terms of socio-economic status, gender, race, and so on). In terms of wealth, that means that people know everything about the wealth distribution and are willing to enter that society anywhere along the spectrum. They could be among the poorest or the richest, or anywhere in between. Rawls called this idea the "veil of ignorance" because the decision of whether to enter a particular society is disconnected from the particular knowledge that the individual has about the level of wealth that he or she will have after making the decision.