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  • July 2021
  • Article
  • Behavioural Public Policy

Invisible Inequality Leads to Punishing the Poor and Rewarding the Rich

By: Oliver P. Hauser, Gordon T. Kraft-Todd, David Rand, Martin A. Nowak and Michael I. Norton
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Abstract

Four experiments examine how the lack of awareness of inequality affects 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 U.S. 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.

Keywords

Income Transparency; Income; Wealth; Equality and Inequality; Knowledge; Behavior; Outcome or Result; Society; Policy

Citation

Hauser, Oliver P., Gordon T. Kraft-Todd, David Rand, Martin A. Nowak, and Michael I. Norton. "Invisible Inequality Leads to Punishing the Poor and Rewarding the Rich." Behavioural Public Policy 5, no. 3 (July 2021): 333–353.
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About The Author

Michael I. Norton

Negotiation, Organizations & Markets
→More Publications

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More from the Authors
  • When Alterations Are Violations: Moral Outrage and Punishment in Response to (Even Minor) Alterations to Rituals By: Daniel H. Stein, Juliana Schroeder, Nicholas M. Hobson, Francesca Gino and Michael I. Norton
  • Beliefs about Gender Differences in Social Preferences By: Christine L Exley, Oliver P. Hauser, Molly Moore and John-Henry Pezzuto
  • Inequality in Researchers' Minds: Four Guiding Questions for Studying Subjective Perceptions of Economic Inequality By: Jon M. Jachimowicz, Shai Davidai, Daniela Goya-Tocchetto, Barnabas Szaszi, Martin Day, Stephanie Tepper, L. Taylor Phillips, M. Usman Mirza, Nailya Ordabayeva and Oliver P. Hauser
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