The Global Financial Crisis and Individual Distress: The Role of Subjective Comparisons after the Collapse of the Icelandic Economy

Abstract

Sociologists have emphasized that abrupt social changes can evoke subjective deprivation that can create subjective injustice and emotional distress. The global economic crisis offers an opportunity to examine this issue. This article builds on relative deprivation theory and proposes that economic crises evoke three subjective comparisons that influence distress: comparisons to 1) past outcomes; 2) the situation of others; and 3) expected future outcomes. Using a national survey obtained during the economic crisis in Iceland, we examine how these comparisons influence subjective injustice and emotional distress (anger and depression). Results indicate that perceived reduction in the standard of living has a more pronounced effect on subjective injustice and anger, 1) when individuals think that the crisis has harmed them more than others; and 2) when they have negative expectations about their future. The study implies that subjective comparisons can moderate the effect of sudden social change on distress.