Building a Better America—One Wealth Quintile at a Time

Michael I. Norton; Dan  Ariely

Article | Perspectives on Psychological Science | January 2011

Building a Better America—One Wealth Quintile at a Time

Abstract

Disagreements about the optimal level of wealth inequality underlie policy debates ranging from taxation to welfare. We attempt to insert the desires of "regular" Americans into these debates, by asking a nationally representative online panel to estimate the current distribution of wealth in the United States and to "build a better America" by constructing distributions with their ideal level of inequality. First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups—even those not usually associated with wealth redistribution such as Republicans and the wealthy—desired a more equal distribution of wealth than the status quo.

Keywords: Taxation; Policy; Perspective; Wealth; Equality and Inequality; Income; Demography; Debates; Welfare or Wellbeing; Diversity; Philanthropy and Charitable Giving; United States;

Format: Print

4 pages

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Citation:

Norton, Michael I., and Dan Ariely. "Building a Better America—One Wealth Quintile at a Time." Perspectives on Psychological Science 6, no. 1 (January 2011): 9–12.

Article | Advances in Experimental Social Psychology

Prosocial Spending and Buying Time: Money as a Tool for Increasing Subjective Well-Being

Elizabeth Dunn, A.V. Whillans, Michael I. Norton and Lara B. Aknin

Researchers have long been interested in the relationship between income and happiness, but a newer wave of work suggests that how people use their money also matters. We discuss the three primary areas in which psychologists have explored the relationship between spending decisions and subjective well-being, beginning with a brief review of seminal research on the benefits of buying experiences. We then offer an in-depth review of two other domains in which changes in spending decisions have been shown to increase well-being: using money to benefit others (“prosocial spending”) and giving up money to have more time (“buying time”). We discuss how, when, and why prosocial spending and buying time promote happiness. In doing so, we critically consider the evidentiary value of past findings (particularly our own) and provide links to all of our available data as well as practical recommendations about how to replicate our findings (e.g., which measures and manipulations produce the most consistent results). Taken together, our studies on prosocial spending and buying time underscore the value of conceptualizing money not only as a stable life circumstance but also as a tool that individuals can intentionally utilize to alter their own happiness levels.

Keywords: wellbeing; Money; Spending; Decision Making; Happiness;

Citation:

Dunn, Elizabeth, A.V. Whillans, Michael I. Norton, and Lara B. Aknin. "Prosocial Spending and Buying Time: Money as a Tool for Increasing Subjective Well-Being." Advances in Experimental Social Psychology 61 (2020). View Details

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Firms are increasingly giving consumers the vote. Eight studies demonstrate that when firms empower consumers to vote, consumers infer a series of implicit promises—even in the absence of explicit promises. We identify three implicit promises to which consumers react negatively when violated: representation (Experiments 1A–1C); consistency (Experiment 2), and non-suppression (Experiment 3). However, when firms honor these implicit promises, voting can mitigate the disappointment that arises from receiving an undesired outcome (Experiment 4). Finally, Experiment 5 identifies one instance when suppressing the vote outcome is condoned: when voters believe that the process of voting has resulted in an unacceptable outcome. More generally, we show that procedural justice plays a key mediating role in determining the relative success or failure of various empowerment initiatives—from soliciting feedback to voting. Taken together, we offer insight into how firms can realize the benefits of empowerment strategies while mitigating their risks.

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Building a Better America—One Wealth Quintile at a Time

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