Explaining the paradoxical effects of poverty on risk taking: The Desperation Threshold Model.

Economic inequality has been proposed to be linked to lower subjective health and well-being through enhanced status anxiety, but evidence is mixed. We propose that the effects of economic inequality on status anxiety, health and well-being depend on how people perceive it and how threatening it is to them. This paper analyses the effects of perceived economic inequality—in general and in everyday life—on status anxiety, health and well-being, and the conditions under which these effects occur. Moreover, we investigate the role of status anxiety as a mediating mechanism in the effects of economic inequality perceptions on subjective health and well-being. We used nationally representative survey data from four countries and found that those who perceive higher economic inequality in their country and those who experience economic inequality in their daily life experienced higher status anxiety. In turn, the effects of perceiving higher economic inequality on status anxiety were associated with lower life satisfaction and poorer perceived health. However, perceptions of economic inequality were not equally threatening for everyone: Perceiving to live in a highly unequal country was associated with higher status anxiety only among those who endorse system-justifying ideologies. Furthermore, perceiving inequality in everyday life was associated with higher status anxiety only among those who perceived they had insufficient economic resources. Overall, the results support the importance of reducing economic inequality and status anxiety for enhancing health and well-being. We discuss future venues for a more nuanced understanding of the psychological effects of economic inequality.

This paper studies the optimal investment problem for a behavioral investor with probability distortion functions and an S-shaped utility function whose utility on gains satisfies the Inada condition at infinity, albeit not necessarily at zero, in a complete continuous-time financial market model. In particular, a piecewise utility function with hyperbolic absolute risk aversion (HARA) is applied. The considered behavioral framework, cumulative prospect theory (CPT), was originally introduced by [A. Tversky & D. Kahneman (1992) Advances in prospect theory: Cumulative representation of uncertainty, Journal of Risk and Uncertainty 5 (4), 297–323]. The utility model allows for increasing, constant or decreasing relative risk aversion. The continuous-time portfolio selection problem under the S-shaped HARA utility function in combination with probability distortion functions on gains and losses is solved theoretically for the first time, the optimal terminal wealth and its replicating wealth process and investment strategy are stated. In addition, conditions on the utility and the probability distortion functions for well-posedness and closed-form solutions are provided. A specific probability distortion function family is presented which fulfills all those requirements. This generalizes the work by [H. Jin & X. Y. Zhou (2008) Behavioral portfolio selection in continuous time, Mathematical Finance 18 (3), 385–426]. Finally, a numerical case study is carried out to illustrate the impact of the utility function and the probability distortion functions.

This research is concerned with explicating and modeling the causal linkages from economic inequality to homicide among nation-states. Specifically, the authors posit that the effect of economic inequality on cross-national homicide rates is mediated by the perceived legitimacy of the system of stratification; that is, the effect of economic inequality on cross-national homicide rates should be substantially attenuated once perceived legitimacy is controlled. The authors test this hypothesis with data from 33 of the 44 nation-states that participated in the third wave of the World Values Survey. Negative binomial regression analyses reveal that perceptions of legitimacy do not mediate the effects of economic inequality on homicide. However, they do indicate that the impact of economic, and political, illegitimacy on homicide depends on the level of modernity. The implications of these findings for the economic inequality-homicide relationship are explored.

Theories of Risk: Testing Investor Behaviour on the Taiwan Stock and Stock Index Futures Markets

To have or not to have: Effects of economic inequality on turnout in European democracies

Consequences of economic inequality: Introduction to a special issue

Previous research has shown that social class influences people’s perceptions, attitudes, and behaviours. However, little attention has been paid to how social class affects people’s motivation, especially in terms of their desire for wealth and status. Furthermore, in societies with higher levels of economic inequality, the disparities between lower- and upper-class individuals in terms of wealth and status become more salient, which could also exert an impact on people’s motivation to seek wealth and status. The present thesis aims to advance our knowledge of how social class and economic inequality shape people’s motivation to pursue wealth and status by providing answers to four key questions: (1) whether social class is associated with people’s desire for wealth and status, (2) whether economic inequality affects people’s desire for wealth and status, (3) whether social class interacts with economic inequality in affecting people’s desire for wealth and status, and (4) whether it is possible to identify potential mechanisms underlying these relationships. In particular, Chapter 1 consists of a literature review introducing key concepts that are related to the current research. It covers theorizing relating to social class, economic inequality, and the social identity approach. In this chapter, I clarify that we define social class as encompassing one’s material wealth and social status, and I explain why we devoted our attention to the investigation of whether and how social class and economic inequality affect people’s motivation to pursue wealth and status. I then provide an overview of the concept as well as the consequences of economic inequality before introducing the social identity approach as the main theoretical framework in the present thesis to understand the potential associations between social class, economic inequality, and people’s desire for wealth and status.Chapter 2 provides an empirical examination of the association between social class and desire for wealth and status. First, studies using cross-national samples provide evidence that higher social class is associated with a stronger desire for wealth and status (Studies 1 and 2). To test the causality of the relationship between class and desire, we then manipulated social class using an experimental design and replicated our correlational findings (Studies 3 and 5). We further explored the potential mechanism underlying the relationship between class and desire for wealth and status (Studies 3-5). In line with social identity theorizing, our results showed that compared to lower-class individuals, upper-class individuals attach greater importance to wealth and status as attributes in defining and categorizing themselves and their group, and such heightened importance explains the effect of higher social class on individuals’ stronger desire for wealth and status.Chapters 3 and 4 focus on whether and how people’s desire for wealth and status change as a response to economic inequality. In particular, Chapter 3 consists of a review of the literature and a theoretical analysis—both of which suggest a potential positive relationship between inequality and desire for wealth and status. The theorizing is further developed through engagement with the social identity perspective which can help understand the “inequality—desire” relationship as well as why and how social class might moderate this relationship. Next, Chapter 4 provides both correlational and experimental evidence that economic inequality heightens people’s desire for wealth and status (Studies 1-4), and that this relationship varies as a function of social class (Studies 1-3). Notably, there is consistent evidence suggesting that the association between inequality and desire is stronger for lower-class individuals than for upper-class individuals.The final chapter (Chapter 5) consists a discussion of broader issues such as the risks for upper-class individuals in relying on wealth and status to define and categorize the self and the obstacles that lower-class individuals face in seeking wealth and status to achieve social mobility. Taken together, by extending our understanding of how social class and economic inequality influence people’s motivation to seek more wealth and status, this thesis sheds lights on one of the consequences of the growing gap between the poor and the wealthy in today’s world.

Economic inequality is associated with a series of social outcomes, including health, social trust, and crime rates. However, little is known about the role of economic inequality as a characteristic of the socioecological environment in individuals' reproductive behavior. According to embodied capital theory, this research explored how individuals calibrate their reproductive timing to maximize payoffs to investment in embodied capital in an environment of high economic inequality. Five studies were conducted to test the hypothesis that higher economic inequality leads people to delay reproduction. Across nations (Study 1), we found that the average reproductive age is higher in nations with greater economic inequality. Study 2 found that people living in more economically unequal U.S. states tend to marry later. In Study 3, individuals who perceived higher levels of inequality in a given society planned to have their children later. Finally, in Study 4, the priming of high inequality led to a greater preference for delaying reproduction, which represented a desire to pursue one's development rather than to build a family (Study 4a and 4b). These results expand the literature regarding the effect of economic inequality on human behavior.

With growing concerns about the allocation inequality of environmental benefits and pollution, it is crucial to investigate whether a special characteristic of China’s environmental inequality has emerged. The present study aims to elucidate the regional spatial features of industrial pollution inequality (IPI) (waste gas, wastewater, and solid waste measured by the Theil index separately) and their relevance to national territorial space planning strategies. Furthermore, we make a novel attempt to develop an integrated framework that employs a developed-Kaya identity with the Logarithmic Mean Divisia Index method to uncover the driving force of IPI disparities. We make use of the data published recently by the provincial panel of China, during the period 2000–2015. Based on this information, we found notable spatial-temporal heterogeneity in China’s IPI, highly correlated to China’s core national territorial space planning strategy, the “T-shaped” spatial development strategy. The empirical results support the “structural features” hypothesis in IPI for China. In particular, the Coastal Region has a great edge in industrial pollution equality. In most provinces in the Inland Corridor along the Yangtze River, the trend of IPI has been alleviated to some extent. However, provinces further inland that are off-side the two axes of “T-shaped” spatial development strategy have to respond to the two-fold challenge of the exacerbated trend in IPI both within and between the regions. Our findings also indicate that the effect of technological inequality is the main driving force for IPI in the earlier stage of development. However, effects of economic inequality together with that of economic structure inequality manifest in the middle or transition period and the economic inequality effect is the determinant in the later stage of development. Additionally, contributions of size effect and inequality effect are changeable over development process, economic inequality effect outweighs the economic size effect for IPI in more developed districts or districts in higher developing phases. These findings may help the government incorporate environmental equality goals into regional policies and contribute to the emerging literature on environmental inequality.

A great deal of attention has been paid to the consequences of economic inequality on political participation, yet only few empirical studies address the macro-micro relationship between income in-equality and individual engagement. Furthermore, empirical indications diverge and give rise to competing theoretical arguments to be tested. This article seeks to fill this gap and to do so by using the latest round of the European Social Survey (ESS). The contribution is twofold: on the one hand, it establishes a direct link between measures of economic and political inequality - albeit of a particular type. On the other, it provides an up-to-date picture on participatory trends in Europe. In more details, income inequality is found to depress overall political participation and, most importantly, to increase the participatory gap between rich and poor for all unconventional forms of engagement.

Purpose:In theory, economic inequality should have a negative impact on trust in institutions.However, empirical studies report mixed findings.This article investigates the proposition that the effect of economic inequality on trust in public institutions is non-linear.Design/methodology/approach: The study employs several OLS models to test hypotheses regarding the influence of economic inequality, the level of income at the individual level, and general trust on trust in public institutions in Ukraine before the full-scale military invasion.The data for Ukraine from the World Values Survey, Wave 7, was used to obtain individuallevel variables.Trust in public institutions was measured as the average level of confidence the respondent had in police, justice system/courts, civil servants, government and parliament.The indicator of regional economic inequality was calculated on the basis of government statistics for territories not occupied by Russia in 2014.Findings: The research points to the "inverted U" relationship between economic inequality and trust in public institutions.Hypotheses about the existence of (1) a positive and significant relationship between an individual income level and trust in public institutions, and (2) a positive and significant relationship between the level of trust in individuals and trust in institutions were also confirmed.In addition, the findings suggest that the level of individual income positively and significantly affects the influence of economic inequality on trust in public institutions. Research limitations/implications:The study used data from one country at one point in time, which requires further research using a wider dataset.Originality/value: The identified "inverted U" relationship can be used to explain the ambiguous results of research on the relationship between economic inequality and trust in public institutions.

Economic inequality has been found to reduce individuals' generosity in western contexts. However, whether this effect is cross-culturally consistent and its internal mechanism remain unclear, as well as how to mitigate this impact. Hence, we explored whether and why economic inequality may erode generosity in a sample of Chinese adults from the social norm perspective and introduced the equal allocation norm to mitigate this effect. Four online studies were conducted: two were correlational (Study 1: n = 300; Study 2: n = 568) and two were experimental (Study 3: n = 289; Study 4: n = 500). Results showed that economic inequality predicted less generosity in the dictator game, and perceived unequal allocation norm accounted for this effect. Moreover, introducing the equal allocation norm could buffer this negative effect. Findings suggest economic inequality impairs generosity, and making the equal allocation norm more salient may guide people to act more generously.

While growing disparities in wealth and income are well-documented across the globe, the role of intellectual property rights is often overlooked. This volume brings together leading commentators from around the world to interrogate the interrelationship between intellectual property and economic inequality. Interdisciplinary and globally oriented by design, the book features economists, legal scholars, policy analysts, and other experts. Chapters address the impact of intellectual property rights on economic inequality, the effect of economic inequality on the protection and enforcement of these rights, and the potential use of innovation law and policy to help reduce economic inequality. The volume also tackles timely issues like race and gender disparities and the North-South divide in innovation. This book is available as Open Access on Cambridge Core.

Previous studies have shown that economic inequality is associated with macrosocial outcomes and psychological processes. However, the role of economic inequality in social cognition is poorly understood. In this article, we propose that perceived economic inequality increases social vigilance. Three experiments were conducted to examine this idea by manipulating the perception of economic inequality. The results revealed that participants in high-inequality environments exhibited higher levels of social vigilance than in low-inequality environments. Furthermore, perceived competition could mediate the link between economic inequality and social vigilance (Experiments 2–3). The findings expand the literature regarding the effect of economic inequality on social cognition and help people better understand the consequences of economic inequality.

Food insecurity and undernutrition remain particularly severe in developing countries where improvements in economic conditions have tended to benefit the advantaged groups and resulted in widespread inequalities in health. This study examined how economic inequality is associated with chronic childhood undernutrition. A child was defined as chronically undernourished (stunted) if his or her height-for-age index was more than two standard deviations below the reference median. Household economic status was measured by an index based on household ownership of durable assets. Bivariate and multivariate analyses were used to estimate the effects of household economic status on stunting. A nationally representative sample of 6251 household interviews in Ghana. Subjects A total of 3077 children aged 0-59 months included in the 2003 Ghana Demographic and Health Survey. Children in the poorest 20% of households are more than twice as likely to suffer from stunting as children in the richest 20% of households independent of the child's age, sex, birth order, breast-feeding duration, birth weight; mother's age at childbirth, body mass index, education; and household access to safe drinking water, hygienic toilet facilities, residence and geographic region (odds ratio = 2.3; 95% confidence interval 1.4-3.7). Also children in the next poorest and in the middle quintiles are significant more likely to be chronically undernourished than children in the richest 20% of households. This study concludes that economic inequality is strongly associated with chronic childhood undernutrition; and reducing economic inequalities and making services more accessible to the poor will be key to improving the health and nutritional status of children in Ghana.