Association between subjective inequality & less well-being, more depression, anxiety, stress, status anxiety, and less trust: Happened only in the US & in Canada, but not in England, Sweden, Japan, & South Africa

The Construct of Subjective Economic Inequality. Anita Schmalor, Steven J. Heine. Social Psychological and Personality Science, March 9, 2021. https://doi.org/10.1177/1948550621996867

Abstract: Economic inequality has been associated with a host of social ills, but most research has focused on objective measures of inequality. We argue that economic inequality also has a subjective component, and understanding the effects of economic inequality will be deepened by considering the ways that people perceive inequality. In an American sample (N = 1,014), we find that some of the key variables that past research has found to correlate with objective inequality also correlate with a subjective measure of inequality. Across six countries (N = 683), we find that the relationship between subjective inequality and different psychological variables varies by country. Subjective inequality shows only modest correlations with objective inequality and varies by sociodemographic background.

Keywords: economic inequality, subjective inequality, culture, well-being

General Discussion

Despite the growing interest in the psychological effects of economic inequality, little is known about whether the subjective experience of inequality is associated with the same social and health problems as objective inequality. In this article, we argued that economic inequality consists of two constructs: objective and subjective inequality. Unlike objective inequality, subjective inequality exists at the individual level, which means that it is a construct that is well suited for investigations of its underlying psychology.

We tested whether subjective inequality predicts some of the same psychological outcomes as have been found with objective inequality. To do so, we created and validated the SIS that captures people’s global experience of economic inequality and their general unfairness beliefs about inequality. In an American sample, people who perceived more inequality reported less well-being, more depression, anxiety, stress, status anxiety, and less trust, replicating much past research that has used objective inequality (e.g., Delhey & Dragolov, 2014; Fan et al., 2011; Wilkinson & Pickett, 2010). We further tested whether we could replicate the findings of status anxiety and well-being across six countries. While subjective inequality was associated with more status anxiety in all countries, the relationship with well-being was more mixed. The negative association between subjective inequality and well-being only occurred in the United States and in Canada, but not in England, Sweden, Japan, and South Africa. These results suggest that culture may influence the psychological response to subjective inequality. Some research on the relationship between objective inequality and well-being has also found mixed results (e.g., Berg & Veenhoven, 2010). These inconsistent results could potentially be explained by the influence of cultural factors. Subjective inequality provides a means through which the moderating force of culture on the effects of inequality can be better understood.

Inequality is often conflated with unfairness beliefs (Starmans et al., 2017), and in both studies, subjective inequality was positively associated with the judgment of inequality as being generally unfair (rs = .58, .47, respectively). However, the relationship between subjective inequality and the various psychological variables held after controlling for the unfairness beliefs about inequality. This suggests that subjective inequality may have unique psychological effects over and above unfairness beliefs. However, our investigations were limited to predicting well-being and status anxiety, and it remains an open question whether unfairness beliefs matter for the relationship between subjective inequality and other psychological constructs.

Across both the United States and international sample, we found small correlations between subjective inequality and the Gini. These correlations suggest that subjective inequality could, at least in part, be influenced by the actual distribution of resources. However, they also suggest that these perceptions are largely independent of the objective level of inequality in one’s state or country. This then raises the question of where do perceptions of inequality come from?

A beginning of an answer to this question comes from other correlates of subjective inequality. People who perceived more inequality tended to be of lower income and SES and were more liberal and less religious. This raises the question of whether these individual differences lead people to construe the world they live in differently or whether they literally live in different worlds. For example, people of lower income may live in poorer neighborhoods, have longer commutes, and have different jobs. However, it could also be that people of lower SES are motivated to perceive more inequality than their higher SES counterparts. There is still much that we do not know about what underlies subjective inequality, and the topic is ripe for future research.

We have focused on the broadest level of economic inequality (encompassing income and wealth inequality and inequality of opportunity), and we assessed subjective inequality in people’s state and country of residence. Future research may benefit from distinguishing between these different facets of economic inequality to assess whether they independently relate to different outcomes. Furthermore, although we replicate the main effects at both the state and country level (for some countries), it would be useful to explore whether the geographic area that subjective inequality captures affects the relationship with different psychological constructs.

While we targeted theoretically fundamental correlates of objective inequality, future research should widen the scope to investigate other variables that have been associated with objective inequality such as health outcomes, obesity, and violent behavior (e.g., Wilkinson & Pickett, 2010). In addition, it would be useful to test which relationships hold across different cultures and which are specific to certain cultures. A key limitation of our findings is that they do not allow us to confidently speak about causality. While it is implausible that higher levels of depression, for example, lead to an increase in the Gini coefficient, it is certainly possible that higher levels of self-reported depression cause people to perceive more inequality because their outlook on the world is bleaker. Here is an example where objective and subjective components need to be considered in tandem in order to draw firmer conclusions.

Our studies are limited in their reliance on online samples which have various idiosyncratic characteristics (e.g., Arditte et al., 2016), and we cannot confidently generalize to other kinds of samples. It will be informative to see how subjective inequality relates to various psychological variables in other kinds of populations. While our results point to the moderating effects of culture, these data cannot speak to what cultural factors are driving these effects. Cultural differences in upward and downward comparisons, what counts as status, and the possibility of social mobility are a few examples of cultural variables that may moderate the effects of subjective inequality. The modest correlations between subjective inequality and the Gini indicate that our measure is tapping into something largely distinct from objective inequality; it is possible that other conceptualizations of subjective inequality may relate differently to objective inequality. With these limitations in mind, this article has attempted to begin a new line of research that focuses on the subjective component of economic inequality.