Half of the respondents, drawn from a national sample of relatively affluent households, were asked whether they could comfortably save 20 percent of their income, and the other half were asked whether they could comfortably live on 80 percent of their income. Of course, to save 20 percent of your income is to live on 80 percent of it. Nevertheless, whereas only half of the respondents thought they could save 20 percent of their earnings, four out of five thought they could comfortably live on 80 percent.
This difference in reactions cannot be chalked up to simple financial illiteracy. People find beef that is 80 percent lean more appealing than beef that is 20 percent fat. They are more impressed by condoms whose manufacturers boast of a 95 percent success rate rather than a 5 percent failure rate. They are more supportive of taxes on the rich when the existing level of income inequality is described in terms of how much more the rich earn than the median wage earner tan when it is described in terms of how much less the median wage earner earns than the rich.