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Economic inequality increases risk taking.

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.

SUBMITTER: Payne BK

PROVIDER: S-EPMC5422783 | biostudies-literature | 2017 May

REPOSITORIES: biostudies-literature

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Economic inequality increases risk taking.

Payne B Keith BK Brown-Iannuzzi Jazmin L JL Hannay Jason W JW

Proceedings of the National Academy of Sciences of the United States of America 20170417 18

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 (<i>n</i> = 811), we found that higher inequality in the outcomes of an economic game led participants to take greater risks ...[more]

PMID: 28416655

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