Income inequality makes the rich more Scrooge-like, study finds

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Credit: George Hodan/public domain

As the annual "season of giving" dawns, a new study finds that stark income inequity - a dramatically rising trend in the United States - makes the "haves" less generous toward others.

Higher-income people were less inclined to be generous both when they came from states where is high and when they were made to believe that there was a sharp divide between rich and poor, a new study found. And they were less charitable in both cases than were low-income people.

Since the 1980s - the end of a 30-year period during which the middle class flourished in the United States - wealth has grown increasingly concentrated at the top of the economic ladder, while low-income Americans have commanded a smaller and smaller share of the nation's wealth.

In 2013, the top 0.1 percent of households received approximately 10 percent of the pretax income, versus approximately 3 percent to 4 percent between 1951 and 1981. The Congressional Budget Office reckoned that between 1979 and 2007, households controlling the top 1 percent of the nation's wealth increased their incomes 275 percent, while the incomes of those in the economy's lowest tier picked up a mere 18 percent.

A study published in the Proceedings of the National Academy of Sciences on Monday compared the giving patterns of rich and poor two ways. Using results from a nationally representative survey that included a donation opportunity at the end, researchers looked at how patterns of giving corresponded to wealth distribution in donors' home states.

Of the 1,498 people who participated in that survey, donation by those with household incomes above $125,000 was more prevalent among those who lived in states in which income inequality was low. Among wealthier survey-takers from states with higher income inequality, fewer took the opportunity to donate.

The authors also conducted an experiment in which 704 people were presented with simulated information portraying their home states as having either high or low income inequality, and then given the opportunity to bestow raffle tickets on another participant.

When they were prompted to believe they lived in a state with high income inequality, those with household incomes above $125,000 were less generous than when they believed incomes in their state were more equitably distributed.

The authors found no such difference in donor behavior among people whose household income was below $15,000.

The new findings may actually somewhat improve the view of wealthy Americans among social science researchers. A wide range of recent studies had suggested that wealthy Americans are, across the board, less generous than less wealthy Americans. This study suggests that that stinginess is, at least, more prominent where the rich are richer and the poor are poorer.

The researchers, led by Stanford University sociologist Robb Willer, surmised that wealthy people embedded in a milieu where rich and poor live in starkly different circumstances may feel more entitled to their moneyed status, or more threatened by the prospective loss of privilege that would come if resources more evenly distributed. They may feel that the system whereby wealth is apportioned is fairer because they so rarely come into contact with the poor.

And the authors of the study do not shrink from its obvious implications: Progressive taxation policies and social services that lift up the poor might not only lift their boats. They might also make the rich more generous about pitching in a penny or two to do so.


Explore further

Having wealthy neighbors may skew beliefs about overall wealth distribution

More information: Stéphane Côté et al. High economic inequality leads higher-income individuals to be less generous, Proceedings of the National Academy of Sciences (2015). DOI: 10.1073/pnas.1511536112

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Nov 24, 2015
Higher-income people were less inclined to be generous both when they came from states where income inequality is high and when they were made to believe that there was a sharp divide between rich and poor, a new study found. And they were less charitable in both cases than were low-income people.
So much for 'trickle down'. But on a psychological level I can somehow understand it. When the number of poor are relatively small then a contribution can have a large, visible effect.
When the number is large then, even though the same number of people are being helped per contribution, you still feel like it's a drop in the ocean.

Of course at some point the poor are just gonna take it all by force. It's not like the rich ever get around to realizing that giving is actually an investment in their own continued well being. They have this illusion that they can continually wall themselves off behind barriers of money, somehow.

Nov 24, 2015
How'd the rich get that way but by discriminating good from bad more effectively than ne'er-do-wells?

- Inheritances.
- Money also opens up access to money making mechanisms that the poor don't have. E.g. fast stock trading; buying better legal representation or, failing that, buying new laws ("too big to fail", anyone?), ...

To quote from Sneakers:
"Because money's most powerful ability is to allow bad people to continue doing bad things at the expense of those who don't have it"

Money isn't simply a score. If it were that would be OK. But money is an enabler for more money. It's a self reinforcing system.

(And classifying poor people as "n'er do wells" is just plain sick. Feel like some antisemitism for an encore?)

Nov 24, 2015
A "donation opportunity" at the end of a survey would be likely to capture donors that don't analyze where they're money is going. They just want to feel good about helping. Affluent donors know where their money is going. They didn't get rich by being stupid with their money. The study authors need a better methodology for measuring this. Why don't they find out who are already giving to charity on a regular basis.

Nov 24, 2015
Since Reagan, we have become a self-righteous and hateful crowd. More conservative than we have been in a hundred years, we now are courting Fascism with our Police State and never-ending Republican Wars.

Income inequality is just the symptom of the general rot in our society, as we become more feudalistic, with a few super-rich and powerful folk grandly isolated from the rest of us.

Since our conservatives celebrated selfishness and sanctified greed, we have gone downhill,and the rest of the world wonders what happened to America.

Nov 24, 2015
To quote from Sneakers
@AA_P
great movie, IMHO

.

.

How'd the rich get that way but by discriminating good from bad more effectively than ne'er-do-wells?
@Doug_Huffman
not all rich folk are the same: my grandmother was quite rich through inheritance, hard work as well as intelligent investment
... and she also died penniless because she gave every cent to the poor and needy in her last decades on earth

labeling people you don't know or who haven't deserved the label through some action or evidence is spreading hatred and prejudice, hence the comment from AA_P


Nov 25, 2015
Obviously the solution is for the government to control all property and economic transactions then they can distribute the wealth fairly. Why hasn't anyone thought of this before?

Nov 25, 2015
Doug..... I'm going to have to consider hitting the ignore button on you..... I have made a decision to no longer expose myself to the delusional psychotic side of human nature. it would be a shame, since every once in a while you post something worth reading, unlike Viko - I never say a single post from that person that had a value with a "+" in front of it. Using the ignore button in that case was very easy.

Nov 25, 2015
" wealthy Americans are, across the board, less generous than less wealthy Americans. "

Likely because so many 'earned' their wealth by buying political favors instead of earning that wealth by meeting the needs and wants of their customers.
Earning wealth the old fashioned way by satisfying customers likely provides a sense of security, but those who depend upon rent seeking know a fickle state can quickly impoverish them if they don't keep paying their 'dues'.

Nov 27, 2015
Doug, you are one incredible douche bag. Time for the ignore button because I have better things to do in life than see a haggish freak like you spewing filth.

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