24 Nov 2015

High economic inequality leads higher-income individuals to be less generous

That notion has been circulating in countless news articles and research papers in recent years. But a newly published study suggests it's not entirely true.
It finds wealthy people are indeed less generous than the less-fortunate, but only if they live in a society with a high level of economic inequality.
Given the fact that the gap between the rich and the rest has been rising steadily in the United States—Pew reported two years ago that inequality is at its highest level since 1928—that's not comforting news. But it suggests that miserliness, rather than stemming directly from wealth, is triggered in part by societal conditions.
Writing in the Proceedings of the National Academy of Sciences, a research team led by Stéphane Côté discovers this dynamic in both a nationally representative survey and an online experiment.
The survey utilized data from the Measuring Morality study, a nationally representative survey of U.S. residents. The 1,498 participants reported their household income, along with other demographic information. Researchers calculated the level of income inequality in each person's home state.
To measure generosity, participants were told they had randomly received 10 tickets, each of which was worth one entry in a raffle with a monetary prize. They were given the option of transferring one or more of the tickets to another participant who did not receive any.
"Income was negatively associated with generosity in the most unequal states, but positively associated with generosity in the least unequal states," the researchers report. Specifically, higher levels of inequality were associated with "reduced generosity among people in the top 15 percent of the income distribution."
The experiment featured 704 people recruited online via Amazon's Mechanical Turk. Approximately half viewed a pie chart that showed the level of inequality in their home state was relatively high; the others saw a similar chart that gave the impression that inequality in their home-state inequality was relatively low.
Like the participants in the earlier survey, subjects were then told they had 10 raffle tickets, and indicated how many they wanted to give to another participant who had none.
"When inequality was portrayed as relatively high," the researchers write, "higher-income participants were less generous than lower-income participants. When inequality was portrayed as relatively low, however, income was not significantly associated with generosity."
What's behind this unfortunate effect? Côté and his colleagues point to several possibilities.
"Higher inequality might trigger a sense of entitlement, because higher-income individuals perceive a wider gap between their social standing and that of most others," they write. It also may lead the wealthy "to worry more about losing their privileged standing," incentivizing them to hang on to more of their money.
In addition, they add, "Where greater inequality exists, psychological motivations to justify their uniquely privileged position could lead higher-income individuals to view the prevailing distribution of resources as fair and just." If everyone basically gets what they deserve, why should I share my bounty?
So, as you settle in to watch one of the thousands of theatrical, television, or film adaptations of A Christmas Carol this holiday season, have a little compassion for the misery-spreading central character. As Charles Dickens so vividly chronicled in his novels, economic inequality in Victorian England was at obscene levels.

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