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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: [email protected]
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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

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