The Psychology of Inequality

If you rise, I fall: Equality is prevented by the misperception that it harms advantaged groups

Nine preregistered studies ( n = 4197) demonstrate that advantaged group members misperceive equality as necessarily harming their access to resources and inequality as necessarily benefitting them. Only when equality is increased within their ingroup, instead of between groups, do advantaged group members accurately perceive it as unharmful. Misperceptions persist when equality-enhancing policies offer broad benefits to society or when resources, and resource access, are unlimited. A longitudinal survey of the 2020 U.S. voters reveals that harm perceptions predict voting against actual equality-enhancing policies, more so than voters’ political and egalitarian beliefs. Finally two novel-groups experiments reveal that advantaged participants’ harm misperceptions predict voting for inequality-enhancing policies that financially hurt them and against equality-enhancing policies that financially benefit them. Misperceptions persist even after an intervention to improve decision-making. This misperception that equality is necessarily zero-sum may explain why inequality prevails even as it incurs societal costs that harm everyone. , Advantaged groups misperceive equality as harming their resource access, which predicts voting against equality policies.

Is Inequality Inevitable?

Wealth naturally trickles up in free-market economies, model suggests

A psychologically rich life: Beyond happiness and meaning.

Pain of Paying? — A Metaphor Gone Literal: Evidence from Neural and Behavioral Science

How do individuals consider the price of a good when making purchase decisions? Standard economic theories assume an analytical process: Individuals consider th

Revisiting evidence for an attentional tunneling effect caused by scarcity

People in poverty sometimes behave in ways that perpetuate their socioeconomic condition. By one influential account, these behaviors arise from psychological effects of scarcity on attention that create greater focus toward managing scarce resources, at the cost of attention to potentially-beneficial information outside of this ‘tunnel’. Although the tunneling hypothesis has been widely discussed in academia and beyond, its direct empirical support derives primarily from a landmark study by Shah et al. (2012) in which participants played games while their access to resources was experimentally manipulated, rendering participants either ‘rich’ or ‘poor’. Here, we present new analyses that contest the original interpretation of the data, showing that the behavioral differences between ‘rich’ and ‘poor’ participants are more parsimoniously explained by the game’s structure than by an attentional shift caused by the scarcity manipulation—a conclusion we substantiate through an additional experiment. We contextualize our findings within the literature on scarcity and attention, and highlight the need for greater clarity regarding the tunneling hypothesis itself.

When It’s Bad to Have Good Choices

Why are well-fed people in affluent countries often unhappy and anxious?

Global Inequality — Harvard University Press

Winner of the Bruno Kreisky Prize, Karl Renner InstitutA Financial Times Best Economics Book of the Year An Economist Best Book of the Year A Livemint Best Book of the YearOne of the world’s leading economists of inequality, Branko Milanovic presents a bold new account of the dynamics that drive inequality on a global scale. Drawing on vast data sets and cutting-edge research, he explains the benign and malign forces that make inequality rise and fall within and among nations. He also reveals who has been helped the most by globalization, who has been held back, and what policies might tilt the balance toward economic justice.“The data [Milanovic] provides offer a clearer picture of great economic puzzles, and his bold theorizing chips away at tired economic orthodoxies.”—The Economist“Milanovic has written an outstanding book…Informative, wide-ranging, scholarly, imaginative and commendably brief. As you would expect from one of the world’s leading experts on this topic, Milanovic has added significantly to important recent works by Thomas Piketty, Anthony Atkinson and François Bourguignon…Ever-rising inequality looks a highly unlikely combination with any genuine democracy. It is to the credit of Milanovic’s book that it brings out these dangers so clearly, along with the important global successes of the past few decades.—Martin Wolf, Financial Times

The Myth of Class Reductionism

The fight for racial and gender justice has always been about economic inequality, too.

Former High Court Justice warns that poverty is eroding Australia's democracy

Poverty is eroding Australia’s democracy, with former High Court Justice Michael Kirby warning that the growing divide between the powerful and the vulnerable is creating a vicious cycle of disadvantage and political exclusion.

Attention is all we have

A conjectural theory of cognitive inequality

The persistence of cognitive biases in financial decisions across economic groups

While economic inequality continues to rise within countries, efforts to address it have been largely ineffective, particularly those involving behavioral approaches. It is often implied but not tested that choice patterns among low-income individuals may be a factor impeding behavioral interventions aimed at improving upward economic mobility. To test this, we assessed rates of ten cognitive biases across nearly 5000 participants from 27 countries. Our analyses were primarily focused on 1458 individuals that were either low-income adults or individuals who grew up in disadvantaged households but had above-average financial well-being as adults, known as positive deviants. Using discrete and complex models, we find evidence of no differences within or between groups or countries. We therefore conclude that choices impeded by cognitive biases alone cannot explain why some individuals do not experience upward economic mobility. Policies must combine both behavioral and structural interventions to improve financial well-being across populations.

Pay Enough or Don't Pay at All*

Abstract. Economists usually assume that monetary incentives improve performance, and psychologists claim that the opposite may happen. We present and disc

Meritocracy: the great delusion that ingrains inequality | Jo Littler

From Theresa May to Donald Trump, our leaders sell it as a utopian system of fairness – but ‘merit’ has been manipulated to privilege the wealthy