Hostname: page-component-8448b6f56d-sxzjt Total loading time: 0 Render date: 2024-04-18T02:36:37.969Z Has data issue: false hasContentIssue false
  • English
  • Français

Invisible inequality leads to punishing the poor and rewarding the rich

Published online by Cambridge University Press:  06 March 2019

OLIVER P. HAUSER Open the ORCID record for OLIVER P. HAUSER [Opens in a new window] ,
GORDON T. KRAFT-TODD ,
DAVID G. RAND ,
MARTIN A. NOWAK  and
MICHAEL I. NORTON
OLIVER P. HAUSER*
Affiliation:
University of Exeter Business School, Exeter, UK
GORDON T. KRAFT-TODD
Affiliation:
Yale University, New Haven, CT, USA
DAVID G. RAND
Affiliation:
Massachusetts Institute of Technology, Cambridge, MA, USA
MARTIN A. NOWAK
Affiliation:
Harvard University, Cambridge, MA, USA
MICHAEL I. NORTON
Affiliation:
Harvard Business School, Cambridge, MA, USA
*
*Correspondence to: Oliver P. Hauser, University of Exeter Business School, Rennes Dr, ExeterEX4 4PU, UK. Email: o.hauser@exeter.ac.uk
Get access Rights & Permissions [Opens in a new window]

Abstract

Four experiments examine how lack of awareness of inequality affect behaviour towards the rich and poor. In Experiment 1, participants who became aware that wealthy individuals donated a smaller percentage of their income switched from rewarding the wealthy to rewarding the poor. In Experiments 2 and 3, participants who played a public goods game – and were assigned incomes reflective of the US income distribution either at random or on merit – punished the poor (for small absolute contributions) and rewarded the rich (for large absolute contributions) when incomes were unknown; when incomes were revealed, participants punished the rich (for their low percentage of income contributed) and rewarded the poor (for their high percentage of income contributed). In Experiment 4, participants provided with public education contributions for five New York school districts levied additional taxes on mostly poorer school districts when incomes were unknown, but targeted wealthier districts when incomes were revealed. These results shed light on how income transparency shapes preferences for equity and redistribution. We discuss implications for policy-makers.

Type
Article
Information
Behavioural Public Policy , Volume 5 , Issue 3 , July 2021 , pp. 333 - 353
Copyright
Copyright © Cambridge University Press 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abeler, J. et al. (2011), ‘Reference Points and Effort Provision’, American Economic Review, 101(2): 470–492.CrossRefGoogle Scholar
Akinola, M. and Mendes, W. B. (2013), ‘It's Good to Be the King: Neurobiological Benefits of Higher Social Standing’, Social Psychological and Personality Science, 5(1): 43–51.CrossRefGoogle Scholar
Alesina, A. and Angeletos, G.-M. (2005), ‘Fairness and Redistribution’, American Economic Review, 95(4): 960–980.CrossRefGoogle Scholar
Anderson, L. R., Mellor, J. M. and Milyo, J. (2008), ‘Inequality and public good provision: An experimental analysis’, The Journal of Socio-Economics, 37(3): 1010–1028.CrossRefGoogle Scholar
BBC, (2017), Speeding fines rise for most serious cases. BBC.co.uk. Available at: https://www.bbc.co.uk/news/uk-38724301.Google Scholar
Bloom, M. and Michel, J. G. (2002), ‘The relationships among organizational context, pay dispersion, and among managerial turnover’, Academy of Management Journal.Google Scholar
Breza, E., Kaur, S. and Shamdasani, Y. (2017), ‘The Morale Effects of Pay Inequality’, The Quarterly Journal of Economics, 133(2): 611–663.CrossRefGoogle Scholar
Brown-Iannuzzi, J. L. et al. (2015), ‘Subjective Status Shapes Political Preferences’, Psychological Science, 26(1): 15–26.CrossRefGoogle ScholarPubMed
Buhrmester, M., Kwang, T. and Gosling, S. D. (2011), ‘Amazon's Mechanical Turk: A New Source of Inexpensive, Yet High-Quality, Data? Perspectives on Psychological Science, 6(1): 3–5.CrossRefGoogle ScholarPubMed
Cappelen, A. W. et al. (2013), ‘Just Luck: An Experimental Study of Risk-Taking and Fairness’, American Economic Review, 103(4): 1398–1413.CrossRefGoogle Scholar
Cappelen, A. W. et al. (2007), ‘The Pluralism of Fairness Ideals: An Experimental Approach’, American Economic Review, 97(3): 818–827.CrossRefGoogle Scholar
Card, D. et al. (2012), ‘Inequality at Work: The Effect of Peer Salaries on Job Satisfaction’, American Economic Review, 102(6): 2981–3003.CrossRefGoogle Scholar
Chou, E. Y., Parmar, B. L. and Galinsky, A. D. (2016), ‘Economic Insecurity Increases Physical Pain’, Psychological Science, 27(4): 443–454.CrossRefGoogle ScholarPubMed
Congressional Budget Office, (2007), Average Federal Tax Rates. Available at: http://www.cbo.gov/publication/42870.Google Scholar
Crockett, M. J. et al. (2014), ‘Harm to others outweighs harm to self in moral decision making’, Proceedings of the National Academy of Sciences, 111(48): 17320–17325.CrossRefGoogle ScholarPubMed
Davidai, S. and Gilovich, T. (2015), ‘Building a More Mobile America—One Income Quintile at a Time’, Perspectives on Psychological Science, 10(1): 60–71.CrossRefGoogle ScholarPubMed
Fehr, E. and Gächter, S. (2002), ‘Altruistic punishment in humans’, Nature, 415(6868): 137–140.CrossRefGoogle ScholarPubMed
Frohlich, N., Oppenheimer, J. A. and Eavey, C. L. (1987), ‘Choices of principles of distributive justice in experimental groups’, American Political Science Review, 31(3).Google Scholar
Gächter, S. et al. (2017), ‘Growth and Inequality in Public Good Provision’, Journal of Public Economics.CrossRefGoogle Scholar
Harrison, G. W. and List, J. A. (2004), ‘Field Experiments’, Journal of Economic Literature, 42(4): 1009–1055.CrossRefGoogle Scholar
Hauser, O. P. and Norton, M. I. (2017), ‘(Mis)perceptions of inequality’, Current Opinion in Psychology, 18, pp. 21–25.CrossRefGoogle ScholarPubMed
Hauser, O. P. et al. (2016), ‘Think Global, Act Local: Preserving the Global Commons’, Scientific Reports, 6.CrossRefGoogle ScholarPubMed
Hauser, O. P., Gino, F. and Norton, M. I. (2019), Budging beliefs, nudging behaviour.CrossRefGoogle Scholar
Hauser, O. P., Linos, E. and Rogers, T. (2017), ‘Innovation with field experiments: Studying organizational behaviors in actual organizations’, Research in Organizational Behavior, 37, pp. 185–198.CrossRefGoogle Scholar
Hauser, O. P., Nowak, M. A. and Rand, D. G. (2014), ‘Punishment does not promote cooperation under exploration dynamics when anti-social punishment is possible’, Journal of Theoretical Biology, 360(C): 163–171.CrossRefGoogle Scholar
Hauser, O. P., Traulsen, A. and Nowak, M. A. (2014), ‘Heterogeneity in background fitness acts as a suppressor of selection’, Journal of Theoretical Biology, 343, pp. 178–185.CrossRefGoogle Scholar
Jachimowicz, J., To, C. and Hauser, O. (2018), Team Pay Inequality: Pay Disparity In Large Teams Increases Employee Turnover By Reducing Job Control. Working Paper.CrossRefGoogle Scholar
Jachimowicz, J. M. et al. (2017), ‘Community trust reduces myopic decisions of low-income individuals’, Proceedings of the National Academy of Sciences.CrossRefGoogle ScholarPubMed
Jachimowicz, J. M., Hauser, O. P., et al. (2018), ‘The critical role of second-order normative beliefs in predicting energy conservation’, Nature Human Behaviour, 2, pp. 757–764.CrossRefGoogle ScholarPubMed
Jordan, J. J. et al. (2016), ‘Third-party punishment as a costly signal of trustworthiness’, Nature, 530(7591): 473–476.CrossRefGoogle ScholarPubMed
Kiatpongsan, S. and Norton, M. I. (2014), ‘How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay’, Perspectives on Psychological Science, 9(6): 587–593.CrossRefGoogle ScholarPubMed
Konow, J., (2000), ‘Fair shares: Accountability and cognitive dissonance in allocation decisions’, The American Economic Review, 90(4): 1072–1091.CrossRefGoogle Scholar
Kraft-Todd, G. T., Bollinger, B., Gillingham, K., Lamp, S. and Rand, D. G. (2018), ‘Credibility-enhancing displays promote the provision of non-normative public goods’, Nature, 563(7730).CrossRefGoogle ScholarPubMed
Kraft-Todd, G., Yoeli, E., Bhanot, S. and Rand, D. (2015), ‘Promoting cooperation in the field’, Current Opinion in Behavioral Sciences, 3, pp. 96-101.CrossRefGoogle Scholar
Krasnow, M. M. et al. (2016), ‘Looking Under the Hood of Third-Party Punishment Reveals Design for Personal Benefit’, Psychological Science, pp. 1–14.Google ScholarPubMed
Kraus, M. W. and Mendes, W. B. (2014), ‘Sartorial symbols of social class elicit class-consistent behavioral and physiological responses: A dyadic approach’, Journal of Experimental Psychology: General.CrossRefGoogle ScholarPubMed
Kraus, M. W., Piff, P. K. and Keltner, D. (2009), ‘Social class, sense of control, and social explanation’, Journal of Personality and Social Psychology, 97(6): 992–1004.CrossRefGoogle ScholarPubMed
Kuziemko, I. et al. (2015), ‘How Elastic Are Preferences for Redistribution? Evidence from Randomized Survey Experiments’, American Economic Review, 105(4): 1478–1508.CrossRefGoogle Scholar
Lago-Peñas, I. and Lago-Peñas, S. (2010), ‘The determinants of tax morale in comparative perspective: Evidence from European countries’, European Journal of Political Economy, 26(4): 441–453.CrossRefGoogle Scholar
List, J., (2006), ‘Field Experiments: A Bridge between Lab and Naturally Occurring Data’, Advances in Economic Analysis & Policy, 6(2).Google Scholar
Ludwig, J., Kling, J. R. and Mullainathan, S. (2011), ‘Mechanism experiments and policy evaluations’, Journal of Economic Perspectives, 25(3).CrossRefGoogle Scholar
Maryland, CPA, (2016), Charitable deduction averages 2014. Marylands Premier Group of Certified Public Accountants. Available at: http://www.maryland-cpa.com/news/charitable-deduction-averages-2014/ [Accessed April 2017].Google Scholar
Nikiforakis, N., Noussair, C. N. and Wilkening, T. (2012), ‘Normative conflict and feuds: The limits of self-enforcement’, Journal of Public Economics, 96(9-10): 797–807.CrossRefGoogle Scholar
Nishi, A. et al. (2015), ‘Inequality and visibility of wealth in experimental social networks’, Nature, pp. 1–14.Google ScholarPubMed
Norton, M. I., (2014), ‘Unequality: Who Gets What and Why It Matters’, Policy Insights from the Behavioral and Brain Sciences, 1(1): 151–155.CrossRefGoogle Scholar
Norton, M. I. and Ariely, D. (2011), ‘Building a Better America—One Wealth Quintile at a Time’, Perspectives on Psychological Science, 6(1): 9–12.CrossRefGoogle ScholarPubMed
Norwegian Tax Administration, (2015), Norway Income Database. Available at: http://www.skatteetaten.no/nn/Person/Skatteoppgjer/Sok-i-skattelistene/Hva-star-i-skattelistene/.Google Scholar
Oishi, S., Kesebir, S. and Diener, E. (2011), ‘Income Inequality and Happiness’, Psychological Science, 22(9): 1095–1100.CrossRefGoogle ScholarPubMed
Payne, B. K., Brown-Iannuzzi, J. L. and Hannay, J. W. (2017), ‘Economic inequality increases risk taking’, Proceedings of the National Academy of Sciences, 114(18): 4643–4648.CrossRefGoogle ScholarPubMed
Pfeffer, J. and Langton, N. (1993), ‘The Effect of Wage Dispersion on Satisfaction, Productivity, and Working Collaboratively: Evidence from College and University Faculty’, Administrative Science Quarterly, 38(3): 382–407.CrossRefGoogle Scholar
Rand, D. G., (2012), ‘The promise of Mechanical Turk How online labor markets can help theorists run behavioral experiments’, Journal of Theoretical Biology, 299(C): 172–179.CrossRefGoogle ScholarPubMed
Rand, D. G. et al. (2009), ‘Positive interactions promote public cooperation’, Science, 325, pp. 1272–1275.CrossRefGoogle ScholarPubMed
Rawls, J., (1971), A theory of justice, Belknap.Google Scholar
Rockenbach, B. and Milinski, M. (2006), ‘The efficient interaction of indirect reciprocity and costly punishment’, Nature, 444(7120): 718–723.CrossRefGoogle ScholarPubMed
Sands, M. L., (2017), ‘Exposure to inequality affects support for redistribution’, Proceedings of the National Academy of Sciences of the United States of America.CrossRefGoogle ScholarPubMed
Shaw, J. D., (2014), ‘Pay Dispersion’, Annual Review of Organizational Psychology and Organizational Behavior, 1, pp. 521–544.CrossRefGoogle Scholar
Sheehy-Skeffington, J., Kteily, N. and Hauser, O. P. (2016), ‘Antecedents and consequences of perceptions of economic inequality. Tobin Project Conference on Inequality Decision-Making, Paper Presentation.Google Scholar
Sullivan, M. and Felton, E. (2014), PTA fundraising data shows massive gap between haves and have-nots. The New York World. Available at: http://www.thenewyorkworld.com/2014/08/06/pta-2/ [Accessed April 29, 2017].Google Scholar
Thaler, R. H. and Sunstein, C. R. (2008), Nudge: Improving Decisions about Health, Wealth, and Happiness, New Haven: Yale University Press.Google Scholar
Census Bureau, US (2013), Income and Poverty in the United States, Available at: http://www.census.gov/hhes/www/income/data/incpovhlth/2013/table4.pdf.Google Scholar
Van Dijk, E. and Wilke, H. (1994), ‘Asymmetry of wealth and public good provision’, Social Psychology Quarterly.Google Scholar
Weissman Center for International Business, (2016), New York City Median Household Income. Baruch College CUNY. Available at: http://www.baruch.cuny.edu/nycdata/income-taxes/med_hhold_income.htm [Accessed April 29, 2017].Google Scholar
Supplementary material: PDF

Hauser et al. supplementary material

Hauser et al. supplementary material
Download Hauser et al. supplementary material(PDF)
PDF 5.6 MB