Does Money Make You Mean?

I've previously written about studies by social psychologists Dacher Keltner and Paul Piff that show that wealthy people are less helpful and more likely to engage in unethical behavior than people of average means. TED has released an entertaining 16-minute talk by Dr. Piff discussing and showing video of some of these studies.

Although I find the studies, in the aggregate, quite persuasive, I'm less impressed with Dr. Piff's suggestions for change. In fact, they illustrate some of the limitations of social psychology as a discipline.

• Dr. Piff recommends priming prosocial concepts—he calls them “nudges”—to encourage prosocial behavior. Such prompts are not very common in a capitalist society, and their effects are likely to be temporary, since they are certain to be drowned out by prompts that encourage selfish behavior, such as those contained in advertising.
• Like most psychologists, he advocates an individual solution to encouraging helpful behavior, when the real problem is structural. Changing rich people one rich person at a time is a slow process, especially when you're asking them to swim upstream against the influence of their culture.
• His suggested solutions are directed only at symptoms of the problem, such as failure to help people, and do not address what he identifies as the cause of the problem, social inequality, which, as he says, continues to increase.

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Class Acts

Me First

A Conservative Windfall

British economists Nattavudh Powdthavee and Andrew Oswald suggest two explanations for people's political attitudes: (1) they are the result of “deeply ethical views,” or (2) they are motivated by self-interest. Their study is relevant to the second possibility. They looked at the effect of winning the lottery on political attitudes.

Many previous studies have found that rich people are more conservative, but this is subject to different interpretations. Higher income could cause conservatism, conservatism could cause higher income, or they could both be jointly caused by some other variable, i.e., having wealthy parents. Studying lottery winners is an interesting idea because a lottery is a truly random assignment of people to the condition of being “rich.” Since the authors had data from before and after the win, they could look at its effect on political attitudes while holding individual differences constant.

The data came from the British Household Panel Survey, an ongoing study in which the same people are contacted every year. Between 1996 and 2009, 4277 different people reported winning the British National Lottery 9003 times. 94.65% of these were small wins of less than £500 (as of this writing, $820). The remaining 5.35% were over £500 and were considered big wins. (The biggest win was £185,000. Unfortunately, they do not report an average.) Winners were compared to people who had no lottery winnings, either because they did not play or played and lost.

All respondents were asked which political party they favored. Only supporters of the Conservative and Labour parties were included in the analysis, since these parties are clearly right and left leaning. (The authors classify the Liberal Democrats as a centrist party.)  Participants were also asked to locate themselves on a 7-point scale, from a strong supporter of the Labour Party to a strong supporter of the Conservative Party. The scale measured changes in attitude strength regardless of whether the participant changed parties. These data were statistically corrected for prior household income and 12 other control variables.

By comparing the participants' answers to those of the year before, it was possible to identify people who had switched from favoring some other party (or none at all) to favoring either the Labour or Conservative parties in the year of the win. 

Approximately 13% of the non-winners switched to the Conservative Party that year, along with 14% of the small winners and 18% of the big winners. The data from the 7-point scale were consistent with these findings, showing that the greater the winnings, the greater the conservative shift. For unknown reasons, the conservative shift among winners was greater for men than for women. 

Since each lottery winner's political leanings were measured before and after their windfall, this design goes a long way toward controlling alternative explanations. However, there is a problem. It's possible that people who play the lottery are not representative of the population. For example, in the US, the lottery functions as a regressive tax, since low income people spend more per capita. In addition, men, middle-aged (45-64) people, and people with less education play more. In defense of the representativeness of their sample, the authors note that 57% of UK citizens play the lottery at least once in a given year. However, they had no measure of how often each person played. Since the more often you play, the greater your chance of winning, the big winners were probably people who played regularly.

My guess is that winning the lottery sensitizes people to the tax consequences of winning. The British income tax is more progressive than ours, and Conservative Party propaganda emphasizes keeping taxes low. People who play the lottery often may differ from non-players in a way that makes them more susceptible to a conservative change. Maybe they are particularly sensitive to variations in their income.

This is not the first study to look at the relationship between wealth and self-interest. Several American studies have found that higher income people are less helpful and more likely to cheat or engage in unethical behavior.

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Me First

Class Acts

Bending the Curve

Me First

The evidence of increasing wealth inequality in the United States, combined with self-interested attempts by the organized rich to deny a financial safety net to the poor, have led researchers to examine differences in the psychological cultures of people of different income levels. Social psychologist Paul Piff and his colleagues have proposed that wealthy Americans are less helpful than their middle class or poor fellow citizens.

Despite some highly publicized counterexamples, rich people donate a smaller percentage of their income to charity than poor people. In a 2001 survey, the Independent Sector found that families earning less than $25,000 per year give away on average 4.2% of their incomes to charity, while those earning more than $75,000 per year give away 2.7%. In a series of four laboratory experiments, Piff and his colleagues found upper class participants to be less generous, trusting and helpful than lower class participants. A new set of seven studies by Piff and others both broadens the evidence for upper class selfishness by examining the relationship between social class and ethical behavior, and looks more carefully at the reasons for it.

That part of Piff's research that has captured mass media attention is two studies of class differences in driving behavior. As one blogger put it, “Rich people are more likely to drive like assholes.” In these studies, observers surreptitiously watched whether drivers illegally cut off other cars at an intersection, or illegally cut off pedestrians in the crosswalk. Cars were classified into five categories of status depending on their age, make and appearance. (Observers were able to do this with high levels of agreement.) The results are shown below, and were statistically significant.

Of course, the conclusion that rich people are more likely to behave illegally depends on there being a high correlation between people's personal wealth and the value of their car. The authors cite one source for this plausible assertion; I have not yet been able to track it down.

The remaining five studies were laboratory experiments which compared the willingness of students of different family income levels to engage in mildly unethical behaviors such as helping themselves to candy intended for children, cheating in an experimental game, or reporting greater willingness to engage in unethical behaviors at work. An important purpose of these studies was to look at the relationship between these behaviors and a measure of favorable attitudes toward greed, i.e., “Overall, greed is moral.”

In all five studies, upper class participants showed greater willingness to behave unethically. The measure of greed also predicted unethical behavior. More importantly, the relationship between social class and unethical behavior was mediated by greed. That is, the relationship between social class and misbehavior was no longer significant after statistically eliminating the effect of greed.

To further demonstrate the mediating role of greed, Piff primed the idea that greed is good by asking participants to list three social benefits of greed. Not only did students given this prime endorse more unethical behaviors, but the differences between the social classes disappeared. That is, the lower and middle class students endorsed just as many unethical behaviors as the richer students after completing the “greed-is-good” exercise.

Piff's explanations for his results is that wealthy people are not dependent on others to meet their needs and have better resources to cope with unanticipated costs of unethical behavior, i.e., they can better afford a traffic ticket. Their privileged situation encourages goal-directedness, self-centeredness, and lack of concern for others--an attitude of entitlement. The results are social values that view greed as positive, and that in turn lead to less helpful and more unethical behavior. Piff mentions economics education as an additional factor that may encourage upper-class greed.

Since Piff's subjects were college students, I'm surprised he didn't mention parental modeling as a contributing factor. In my view, unethical behavior is deeply embedded in the capitalist system. Adult endorsement of greed may be part of an attempt to justify past selfish and unethical behavior in the workplace, behavior which is perceived as having been required for career advancement, or even to keep one's job.

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Class Acts

Bending the Curve

Class Acts

The number of Americans living below the official poverty line is at its highest level in decades. On the other hand, our political leaders are drawn from those Americans who are highest in socioeconomic status. The average wealth of members of Congress is $13.2 million in the Senate and $5.9 million in the House. Eleven percent of Congress are in the top 1% of the income distribution. These Congresspeople are considering taking serious steps to dismantle the social safety net that is critical to the survival of an increasingly large number of poor Americans. What can social psychology tell us about differences in the attitudes of rich and poor Americans toward personal responsibility, and about differences in their willingness to help those in need or to deliberately hurt other people?

A recent series of experiments by social psychologists led by Dacher Keltner at the University of California at Berkeley have studied the psychology of social class. First, a word on how social class was measured. In some studies, it was measured objectively by asking participants to state their own (or their parents') income and educational attainment. Subjective social class was measured by asking participants to place an “X” on one of ten rungs of a ladder representing their status compared to others. Finally, in some studies, social class was manipulated by having participants to write an essay comparing their own life to that of either a rich or a poor American. Comparing yourself to the poor makes you feel richer, while comparing yourself to the rich makes you feel poorer. These different approaches produced generally consistent results.

Explanations of human behavior can be divided into personal causes (some characteristic of the behaving individual) or situational causes (some aspect of the social environment). How do the rich and the poor explain economic inequality? The Berkeley group hypothesized that since poor people have fewer resources, they exert less personal control over their own outcomes, and they see inequality as more a product of situational forces than the rich. Keltner and his colleagues called their participants' attention to inequality in this country by presenting statistical data. Participants were then asked to rate the importance of twelve explanations of inequality. Some of them were personal (talent, hard work) while others were situational (inheritance, discrimination). These studies also included a measure of personal control over one's own life.

As expected, upper class participants gave more personal explanations for wealth and poverty, and the relationship between social class and social explanation was mediated by feelings of personal control over one's own life. (See my earlier post on I. Q. and prejudice for an explanation of how mediational hypotheses are tested.) Subsequent studies showed that these tendencies to explain behavior as personally or situationally caused apply to other outcomes in addition to economic inequality. If members of economic and political elites believe they have earned their favorable position, and that poor people fail because they lack positive traits, will they be more willing to eliminate social programs that to help the poor?

Do upper and lower classes differ in helpfulness? The Berkeley group proposed that, because the poor depend more on other members of their community for help in times of crisis, they would be more sensitive to the needs of others, more compassionate, and more helpful. An alternative possibility is that because the poor have less, they will be more reluctant to give it away and will be less helpful. In one of their studies (called the “dictator game”), participants were given ten points (later to be exchanged for money) and allowed to split them however they chose between themselves and an anonymous partner. Lower class participants were more generous to their partners. In another study, people were asked how much of one's income a person ought to donate to charity. In this study, social class was both measured objectively and manipulated (by having them compare themselves to the rich or the poor). The results are shown in this chart.

The lines labeled lower and upper class rank refer to the manipulations of thinking about the rich or the poor respectively. High and low social class refer to their objective status (family income and education). Using both measures, the poor were more generous. This finding corresponds to real world studies which consistently show that poor people donate a higher percentage of their income to charity than rich people.

One study tested the hypothesis that the helpfulness of the poor is mediated by compassion. Compassion was manipulated by showing a short film about child poverty or a neutral film. Participants were later given an opportunity to help a fellow student in distress. When shown the neutral film, lower class participants were more helpful than upper class participants. When the compassion-inducing film was shown, there was no difference. The rich were capable of being helpful when reminded of the need to be compassionate. However, the poor appeared to be spontaneously helpful.

Might the upper class's lack of helpfulness also mean that they are more likely to behave unethically for selfish reasons? The Berkeley group did seven studies of social class differences in unethical behavior. When most Americans think about criminal behavior, they think of lower class street criminals whose behavior is heavily publicized by the media. However, the researchers expected the rich to endorse greed as a legitimate motive and behave more unethically than the poor. Two of the studies were observations of drivers. Wealth was measured by the monetary value of their car. Drivers of expensive cars were more likely to cut off other drivers at a four-way stop and to fail to yield the right of way to pedestrians—both illegal under California law.

In other studies, upper class participants took more candy which, if they hadn't taken it, would have been given to children; cheated more on a laboratory task in order to win a monetary prize; and reported greater willingness to lie, steal and behave unethically in hypothetical scenarios. Finally, the authors demonstrated that the unethical behavior of the rich was mediated by greed. Greed was manipulated by asking some participants to list three reasons why greed might be a good thing. Others completed a different list. They then filled out a measure of willingness to endorse unethical behaviors on the job, such as borrowing money from the cash register overnight. When greed was primed, lower class participants endorsed as much unethical behavior as wealthier participants. Without the greed prime, the usual social class differences were obtained.

These studies are impressive both in number and consistency. Obviously, none of these behaviors rise to the level of the recent financial crimes that have cost middle class Americans billions of dollars. But at the very least, they suggest that mass media stereotypes of the rich and the poor need adjustment. In my last post, I reported studies showing that the decisions made by our political leaders correspond most closely to the preferences of the rich. When the wealthiest Americans decide the future of the country during a long recession, they seem almost certain to increase inequality--a problem that has already gotten far out of hand.

Kicking Assessments

This post deals with a local Pittsburgh controversy. My apologies to out-of-towners. Maybe Pittsburgh's political buffoonery is similar to foolishness taking place elsewhere.

The following was written on Friday, December 30:

Judging by media coverage of our tax reassessment controversy, Pittsburgh property owners will soon be marching on city hall with torches and pitchforks. I'd like to take a step back to see whether all this confusion and anger is really justified.

Property values in Allegheny County have not been reassessed since 2002. When there is a long time between reassessments, this places an unfair burden on people whose property values are static or declining, while unfairly benefitting those whose property has increased in value. Since the second group is generally more affluent than the first, failure to reassess is a Robin-Hood-in-reverse social policy. It steals from the poor to give to the rich.

Our politicians and the media have stoked fears that reassessment will lead to tax increases, but it shouldn't if our elected officials follow the law. State law prohibits windfall profits from a reassessment. Municipalities are required to adjust their millage rates downward to ensure the changes are revenue neutral. The magnitude of the tax increases that our more affluent citizens must pay should be balanced by declines in the taxes of less affluent residents.

That doesn't mean Allegheny County's reassessment will be completely fair. Any errors will be heavily publicized by the media, but the appeal process is intended to remedy them, provided they are random and not so numerous as to overwhelm the system.

There will also be families whose personal circumstances do not match those of their neighbors, i.e., people on fixed incomes living in prosperous neighborhoods. Whether their tax increases are unfair is debatable. People benefit from living in a nice neighborhood regardless of the value of their own home. The homestead tax exemption is a partial solution to this problem. We can also take perverse comfort in the fact that Pittsburgh is highly segregated by social class, thus minimizing these mismatches.

Both the outgoing and incoming Allegheny County Executives, Dan Onorato and Rich Fitzgerald, have argued that the county should not be required to reassess its properties unless the rest of Pennsylvania is also forced to do so. I agree that the other counties should be required to update their assessments, since that is fairer to the residents of those counties. However, if frequent reassessment is a beneficial social policy, Allegheny County should do it regardless of what other counties are doing. The only people harmed by this policy are homeowners who are currently getting a free ride. Their taxes will be higher than if they lived in some other county. But their taxes should be higher. To call this unfair is a bit like saying that if Allegheny County enforces laws against DUI but Butler County does not, this is unfair to the drunk drivers of Allegheny County. Is this really a compelling argument?

Our public officials, nominally members of the Jackass Party, have wasted our time and money by refusing to implement the reassessment. This would seem to be a clear indication of their class loyalties. The working poor seldom make campaign contributions. While their rhetoric is intended to mislead us into thinking they are trying to protect poor people from losing their homes, it is the wealthiest persons (and “corporate persons”) who benefit from the delay.

These class loyalties would be more obvious if the news media did a better job of presenting the issues involved in reassessment. Unfortunately, the Pittsburgh Post-Gazette and the other media have added to people's confusion and anger by framing their news stories primarily as “the looming threat of a tax increase,” rather than using the more accurate frame of “restoring fairness to our tax system.”

Fortunately, I didn't post the preceding note because I hadn't yet worked out some of the kinks in my blog. Since then, there have been several developments that have added some nuance my opinion.

It was announced that Pittsburgh residences have increased in value by 46% due to the reassessment. The average for commercial properties is 71%, for an overall average of 57.89%. This should give homeowners an idea of whether their taxes will increase or decrease and by how much. For example, my assessment went up 76%. Subtracting 58% from 76%, I should expect my taxes to increase about 18% as a result of the reassessment. Chris Briem has analyzed these changes in value and found that approximately two-thirds of Pittsburghers will see their taxes drop, while fewer than 5% will be hit with a tax increase of 100% (double) or more. If this is true, Pittsburghers have been hit with an epidemic of false consciousness.

There are some indications that inconsistencies in the reassessment are not random. Rich Lord of the Post-Gazette analyzed the new values in three neighborhood blocks. In increasing order of affluence, they are Sheffield Street in Manchester, Pius Street on the South Side Slopes, and Saint James Place in Shadyside. Contrary to what we might have expected, the assessments increased by 118% in Manchester, 66% in on the Slopes, and only 21% in Shadyside. The average assessment exceeded the average recent sale price in Manchester, but was lower in the other two locations.

Ruth Ann Dailey, the P-G's most conservative local columnist, has suggested there was social class bias in the reassessment: “I'd bet dollars to data entry clerks that we'll find this situation holds true throughout the city—the percentage increases in poor neighborhoods' assessments will be much greater than the increases in the wealthier ones, because assessors can't conceive that anyone's home could be worth so little.”

It is important to find out if this allegation is true. The P-G's sample is far too small to draw a firm conclusion. Someone should analyze a much larger sample of reassessments randomly selected from around the city. If there is evidence of social class bias, they must be all discarded.

Ms. Dailey's benign explanation for class discrimination is not entirely convincing. If data entry clerks were systematically mistaken, I'd bet dollars to campaign contribution checks that these biases were somehow transmitted down the food chain from the politicians at the top. As Lily Tomlin said, “No matter how cynical you get, it's impossible to keep up.”

This morning's paper reports that Rich Fitzgerald has “thrown out” the reassessments. Our 2012 tax bills will use the old rather than the new values, setting up a confrontation with Judge R. Stanton Wettick, Jr., who ordered the reassessment. Fitzgerald has said he will go to jail rather than give in. Judging from some recent reports of conditions in our state prisons, it might be a good idea for all incoming government officials to spend a few nights there, just to give them an additional perspective on how some of their citizens live.


Update (1/14/12)

On Thursday, Allegheny County Executive Rich Fitzgerald faced off against Judge Stanton Wettick. Wettick blinked. The reassessment has been postponed for a year. Poor people will continue to pay more than their share of taxes while rich people and corporations will continue to benefit. Fitzgerald calls this “a great victory.” Next year, they will fight the same battle again. In Pittsburgh, nothing ever gets settled.

After the commercial property assessments were released, the business community, with the help of its friends at the Post-Gazette, went into a front-page, full-court press. We were told that the reassessments of the downtown skyscrapers had no rhyme or reason, and that if corporations were forced to pay their fair share of taxes, they would leave Pittsburgh and throw the city into another recession. The one-year delay gives their high-priced lawyers an opportunity to appeal the reassessments. Should they win some of these battles, reductions in the assessed values of $200 million buildings will have a significant impact on the overall 58% increase in value of city property. If that percentage drops, homeowners will pay more taxes.

One helpful development is that some local journalists, notably Len Barcousky and Brian O'Neill, started to get it, and to inform their audience that the majority of Pittsburghers would have been helped, not hurt, by the reassessment. Blogger Chris Briem's analyses played an important role in spreading that message.

Fitzgerald says he will use the next year to persuade state government to order a reassessment of all the real estate in Pennsylvania. With the Elephants in total control of every branch of state government, it's hard to believe he's serious.