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No evidence that economic inequality moderates the effect of income on generosity.

ABSTRACT: A landmark study published in PNAS [Côté S, House J, Willer R (2015) Proc Natl Acad Sci USA 112:15838-15843] showed that higher income individuals are less generous than poorer individuals only if they reside in a US state with comparatively large economic inequality. This finding might serve to reconcile inconsistent findings on the effect of social class on generosity by highlighting the moderating role of economic inequality. On the basis of the importance of replicating a major finding before readily accepting it as evidence, we analyzed the effect of the interaction between income and inequality on generosity in three large representative datasets. We analyzed the donating behavior of 27,714 US households (study 1), the generosity of 1,334 German individuals in an economic game (study 2), and volunteering to participate in charitable activities in 30,985 participants from 30 countries (study 3). We found no evidence for the postulated moderation effect in any study. This result is especially remarkable because (i) our samples were very large, leading to high power to detect effects that exist, and (ii) the cross-country analysis employed in study 3 led to much greater variability in economic inequality. These findings indicate that the moderation effect might be rather specific and cannot be easily generalized. Consequently, economic inequality might not be a plausible explanation for the heterogeneous results on the effect of social class on prosociality.

SUBMITTER: Schmukle SC

PROVIDER: S-EPMC6525487 | biostudies-literature | 2019 May

REPOSITORIES: biostudies-literature

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No evidence that economic inequality moderates the effect of income on generosity.

Schmukle Stefan C SC Korndörfer Martin M Egloff Boris B

Proceedings of the National Academy of Sciences of the United States of America 20190429 20

A landmark study published in PNAS [Côté S, House J, Willer R (2015) <i>Proc Natl Acad Sci USA</i> 112:15838-15843] showed that higher income individuals are less generous than poorer individuals only if they reside in a US state with comparatively large economic inequality. This finding might serve to reconcile inconsistent findings on the effect of social class on generosity by highlighting the moderating role of economic inequality. On the basis of the importance of replicating a major findin ...[more]

PMID: 31036660

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Project description:IntroductionHealth-income inequality has been the focus of many studies. The relationship between economic conditions and health has also been widely studied. However, not much is known about how changes in aggregate economic conditions relate to health-income inequality. Nevertheless, such knowledge would have both scientific and practical value as substantial public expenditures are used to decrease such inequalities and opportunities to do so may differ over the business cycle. For this reason we examine the effect of the Icelandic economic collapse in 2008 on health-income inequality.MethodsThe data used come from a health and lifestyle survey carried out by the Public Health Institute of Iceland in 2007 and 2009. A stratified random sample of 9,807 individuals 18-79 years old received questionnaires and a total of 42.1% answered in both years. As measures of health-income inequality, health-income concentration indices are calculated and decomposed into individual-level determinants. Self-assessed health is used as the health measure in the analyses, but three different measures of income are used: individual income, household income, and equivalized household income.ResultsIn both years there is evidence of health-income inequality favoring the better off. However, changes are apparent between years. For males health-income inequality increases after the crisis while it remains fairly stable for females or slightly decreases. The decomposition analyses show that income itself and disability constitute the most substantial determinants of inequality. The largest increases in contributions between years for males come from being a student, having low education and being obese, as well as age and income but those changes are sensitive to the income measure used.ConclusionsChanges in health and income over the business cycle can differ across socioeconomic strata, resulting in cyclicality of income-related health distributions. As substantial fiscal expenditures go to limiting the relationship between income and health, the business-cycle effect on equality, which has up until now not received much attention, needs to be considered.

Project description:The novel coronavirus is part of a series of infectious disease outbreaks that include: Ebola, Avian influenza, Middle East respiratory syndrome coronavirus, and Influenza A. This paper addresses the question of how do these epidemics and pandemics affect income inequality in countries around the world during the first two decades of this century. To achieve its objective, the paper develops a model that indicates a positive association between these health crises and income inequality. To empirically test our theoretical predictions, the paper explores the effect on the Gini coefficient of a dummy variable that indicates the occurrence of an epidemic or a pandemic in a country in a given year and the number of deaths per 100,000. To properly address potential endogeneity, we implement a Three-Stage-Least Squares technique. The estimation shows that the number of deaths per 100,000 population variable has a statistically significant positive effect on the Gini coefficient, especially when we incorporate COVID-19 data. This suggests that not only the occurrence, but also the health consequences of COVID-19 have a significant and economically important effect on income inequality.BackgroundThe purpose of the study is to examine the effect of epidemics and pandemics on income inequality. This has important implications as the outcome of this study can guide policymakers into implementing policies that can mitigate the economic consequences of these health crises.MethodsThe study is a cross country analysis using fixed effects estimation. To address potential endogeneity and determine causality, the paper uses the Three-Stage-Least-Squares estimation.ResultsThe paper finds that the number of epidemic deaths per 100,000 population variable has a statistically significant positive effect on the Gini coefficient, especially when we incorporate COVID-19 data.ConclusionsThe paper finds that it is not only the occurrence of an epidemic, captured by the epidemics dummy variable, but also the health consequences, captured by the number of deaths per 100,000 population, that have a significant effect on income inequality. This is especially the case when we incorporate COVID-19 in our analysis.Trial registrationNot Applicable.

Dataset Information

No evidence that economic inequality moderates the effect of income on generosity.

Publications

No evidence that economic inequality moderates the effect of income on generosity.

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