A stand-up comedian once asked his Indian crowd how many of them have ever travelled by airplane. Every hand in the room went up. He later asked the same crowd how many of them were middle-class. The vast majority of hands in the room rose skywards.
By asking these questions in succession, the comedian had exposed the crowd’s hypocrisy. You can afford air-travel in India only if you’re not middle class. The top 20% of Indian households earn a monthly income of Rs 30,000 – barely enough to afford the cheapest air tickets. And yet, people in the audience, who were clearly rich, thought of themselves as being in the middle-class. Why did this happen?
This action can be explained by what statisticians call base-rate neglect. In our own lives, we meet a wide variety of people – ones who are poorer than us and ones who are richer than us. Within our own social circles most of us lie somewhere in the middle, leading us to believe that we are in the middle class. However, India is a country with a population of 1.4 billion people – most of whom we do not meet or interact with. To truly be middle class, you have to lie between the 20th and the 80th percentile of this vast number.
The middle class paradox illustrates how our own personal experiences has an outsized influence on our perception of the world. If you are reading this and you are an Indian, you are not middle-class. In fact, you’re most probably among the top 1% of the country’s earners.
Observations 