Study suggests income inequality pushes people to take greater risks

April 18, 2017 by Bob Yirka report
Credit: CC0 Public Domain

(Phys.org)—A trio of researchers, two with the University of North Carolina and the other with the University of Kentucky, has conducted two kinds of experiments with results suggesting that income inequality in a society can lead those on the bottom to take more risks in hopes of increasing their position. In their paper published in Proceedings of the National Academy of Sciences, Keith Payne, Jason Hannay and Jazmin Brown-Iannuzz describe their experiments and why they believe their results indicate that rising inequality in the world today could lead to a range of poor outcomes.

It is no secret that those on the lower end of the economic spectrum would like to move higher, nor is it a secret that the gap is growing in many countries across the globe. To learn more about the possible real-world impact of this change the researchers carried out two types of experiments designed to learn more about the behavior of those living below the standard of those at the top.

The first type of experiment consisted of asking online volunteers to play a gambling game. Players were shown what they believed to be the average results of previous players—half of the volunteers were told that the best players earned significantly more than other players, while the other half were told the winnings gap was relatively small. Each of the volunteers was then asked how much they felt they needed to win to feel like they had done well and then were given a chance to play by placing bets where they could win real-world money. The betting options were arranged such that the greater the risk, the bigger the potential payoff.

In studying how the volunteers performed, the researchers found that those who were told that prior players had won a lot more than other players tended to place riskier bets, hopefully leading to bigger rewards—they also generally expressed a higher need to win than the other players.

To learn more about real-world conditions, the researchers studied Google search string data regarding risky behavior and financial gain, such as people searching for information about lottery winning, or other ways to win money. They found that people who lived in states where the was the highest tended to conduct many more such searches.

The researchers conclude by suggesting that exposure to high-income lifestyles entices lower-income people to engage in risky behavior in attempting to lift themselves higher.

Explore further: Study results suggest people are less cooperative in unequal societies when wealth inequality is evident

More information: B. Keith Payne et al. Economic inequality increases risk taking, Proceedings of the National Academy of Sciences (2017). DOI: 10.1073/pnas.1616453114

Abstract
Rising income inequality is a global trend. Increased income inequality has been associated with higher rates of crime, greater consumer debt, and poorer health outcomes. The mechanisms linking inequality to poor outcomes among individuals are poorly understood. This research tested a behavioral account linking inequality to individual decision making. In three experiments (n = 811), we found that higher inequality in the outcomes of an economic game led participants to take greater risks to try to achieve higher outcomes. This effect of unequal distributions on risk taking was driven by upward social comparisons. Next, we estimated economic risk taking in daily life using large-scale data from internet searches. Risk taking was higher in states with greater income inequality, an effect driven by inequality at the upper end of the income distribution. Results suggest that inequality may promote poor outcomes, in part, by increasing risky behavior.

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Munix
5 / 5 (1) Apr 18, 2017
Funny, this article. Of course folks at the "bottom" are going to take more risks. They feel that they got nothing to lose because they are hence; at the bottom!
gkam
1 / 5 (5) Apr 18, 2017
We see this since Reagan and "trickle-down", which greatly exacerbated the gulf between rich and (sinking) middle-class.

I am waiting for the Great Overturn, when the poor eat the rich.
Dingbone
Apr 18, 2017
This comment has been removed by a moderator.
gkam
1.6 / 5 (7) Apr 18, 2017
Income inequality destabilizes society, and lets monsters rise.

We are back in the 1930s again. Back then, Hirohito got away with invading Manchuria and China. Mussolini got away with invading Ethiopia, and Hitler got the Sudetenland.

Then, the Decent Folk started fighting back.

We will see it again, if we survive the Trump Wars.
MR166
3.7 / 5 (3) Apr 18, 2017
"I am waiting for the Great Overturn, when the poor eat the rich."

Well Gkam you can have that today if you want, just move to Venezuela. That country has done the most to end income inequality.
MR166
3.7 / 5 (3) Apr 18, 2017
You see the media is not bothering to report the total economic collapse of that country because it will negatively impact the collective agenda.
MR166
5 / 5 (3) Apr 18, 2017
While articles like this have us frittering away our time worrying about income inequality the real danger to mankind is political power inequality! Our freedoms are being taken away a little each and every day and we really have no meaningful say in the matter.
gkam
1.8 / 5 (5) Apr 18, 2017
Then stop voting for the folk who take away our freedoms. Remember all those post-WWII films in authoritarian nations?

"PAPERS! Where are your papers!?"

Your buddy Scalia ruled the cops can do exactly that, and if you cannot prove there and then who you are, thy can put you in jail!

Scalia also ruled if you have been convicted of a capital crime, but can PROVE your innocence, they can still kill you if your appeals run out.

He also ruled in favor of the hunting lodges which then gave him a free hunt, where he died.

TheGhostofOtto1923
3.4 / 5 (5) Apr 18, 2017
I am waiting for the Great Overturn, when the poor eat the rich
Hey maybe then you could afford to put real PV on your roof instead of the krylon kind, suitable for google earth only.
MR166
5 / 5 (1) Apr 18, 2017
Gkam if you really want to complain about the rich getting richer then complain about things like this.
http://www.zerohe...not-lend

YOU are paying the puppet masters and neither party is trying to stop the pillaging.
Uncle Ira
3.7 / 5 (6) Apr 18, 2017
Income inequality destabilizes society, and lets monsters rise.

We are back in the 1930s again. Back then, Hirohito got away with invading Manchuria and China. Mussolini got away with invading Ethiopia, and Hitler got the Sudetenland.

Then, the Decent Folk started fighting back.

We will see it again, if we survive the Trump Wars.


@ Glam-Skippy. How you are Cher? I'm good, thanks for asking.

If you really want to spread the word where it is sorely needed, try this interweb place.

http://forums.del...om/bully

I doubt you will last more than a day, but if you do, they deserve you.
gkam
1 / 5 (4) Apr 18, 2017

Sorry, "Ira", but you have the credibility of Cheney, Bush, Putin, and Trump.
Uncle Ira
4.2 / 5 (5) Apr 18, 2017

Sorry, "Ira", but you have the credibility of Cheney, Bush, Putin, and Trump.


The place is not about me. I been banned there so many times I can not count that high. I just thought you would enjoy getting under their skin.

They hate liberals,,,,, Mexicans,,,,, the environment,,,,,,, think electric cars should be made illegal,,,,,,, anybody who says something bad about Trump should be put in Gitmo,,,,, the only good Muslim is a dead one and such like.

Oh yeah, I almost forget. They also think they are the most reasonable and rational logical people there is and anybody that don't agree with them is a traitor and idiot. They are a real hoot and big fun (if you can last long enough to get under their skin.) Like I said, I usually only last a day or so before they realize it's me and show me the door again. So you don't want to mention Ira or Skippy to them or you won't even get to make one post.
gkam
1.8 / 5 (5) Apr 18, 2017
Well, that sold me.

Have to check it out.

Ooops, . . way too shallow.

Well, . .maybe I'll go back and start an intelligent conversation, . . .
Uncle Ira
4.2 / 5 (5) Apr 18, 2017
Well, . .maybe I'll go back and start an intelligent conversation, . . .
Good luck with that Cher. Let me know how it goes. Like I said, those people are a real hoot because they just know they are too smart for any liberals traitors Democrats weenies socialists.
gkam
1.8 / 5 (5) Apr 18, 2017
I just went back, and they are worse then you portray, not necessarily in offensiveness, but in the pure inanity of the comments.

They are Trump's People.
Uncle Ira
4.3 / 5 (6) Apr 18, 2017
I just went back, and they are worse then you portray, not necessarily in offensiveness, but in the pure inanity of the comments.

They are Trump's People.


I just went back, and they are worse then you portray, not necessarily in offensiveness, but in the pure inanity of the comments.

They are Trump's People.


They are the hard core Trumpettes over there. If you decide to sign up so you can make comment, don't mention Ira or Skippy or couyon or such like or you will immediately get showed to the door. They are on hyper-super-watch-out for me because I have been a pebble in their shoe for years.

I started in on them the first time Obama-Skippy ran for the president and it drove them nuts that an Obama supporter had the nerve to post there. Over the years I think I must have been banned from there 50 times.
gkam
Apr 18, 2017
This comment has been removed by a moderator.
TheGhostofOtto1923
2.3 / 5 (3) Apr 18, 2017
-And dont forget to leave them your name, addy, family members, SSN, and stolen valor assertions like you did here.

They probably already know anyway.

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