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The psychosocial effects of economic inequality depend on its perception

Abstract

Economic inequality might influence subjective well-being through psychological processes such as status competition and social distance. However, evidence for this claim is mixed. In this Perspective, we suggest that inconsistent findings arise because the psychological effects of economic inequality are driven by perceived — rather than objective — inequality. Perceived inequality is not always related to objective inequality for at least three reasons. First, unequal societies tend to be more physically and psychologically segregated, so, paradoxically, people have less contact with inequality in these societies. Second, people are more influenced by signs of economic disparities in their daily life and close circles than by information about inequality at an abstract level. Third, system-justifying ideologies lead people to perceive more or less inequality relative to objective inequality. We conclude that perceived inequality is crucial for understanding how and when objective inequality influences psychological processes and individual outcomes.

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Fig. 1: Psychosocial model of effects of economic inequality.
Fig. 2: The Bimboola paradigm.
Fig. 3: The relationship between objective and perceived inequality.

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Acknowledgements

This research was supported by the Spanish Ministry of Economy and Competitiveness (PID2019-105643GB-I00 and PCI2020-112285), Andalucía’s government grants (A-SEJ-72-UGR20) and the Centre for Social Conflict and Cohesion Studies (COES) (ANID/FONDAP/15130009).

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G.B.W. wrote a first draft of the manuscript after discussing the ideas with all co-authors. All co-authors then revised and rewrote several parts of the manuscript.

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Correspondence to Guillermo B. Willis or Rosa Rodríguez-Bailón.

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Nature Reviews Psychology thanks Felix Cheung, who co-reviewed with Amanda Solomon, and the other, anonymous, reviewers for their contribution to the peer review of this work.

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Willis, G.B., García-Sánchez, E., Sánchez-Rodríguez, Á. et al. The psychosocial effects of economic inequality depend on its perception. Nat Rev Psychol 1, 301–309 (2022). https://doi.org/10.1038/s44159-022-00044-0

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