Economic Inequality Shapes Judgments of Consumption

Abstract

Economic inequality affects not only individuals’ judgments and behavior in their own lives, but also those individuals’ judgements and behavior toward others—both people and firms. First, the consumption decisions of others are often evaluated through a moral lens, such that lower‐income consumers are held to more negative, restrictive standards of what is acceptable to purchase. Second, firms that perpetuate inequality among their employees or their customers—through unequal pay or unequal services—are viewed negatively. We discuss the implications of economic inequality shaping people’s moral scrutiny of others.

Lay economic reasoning: An integrative review and call to action

“…Together with research demonstrating that lay people often overestimate others' WTP (Frederick, 2012; Jung et al, 2020), these findings also suggest the possibility that relative to consumers' own egocentric valuations, price discrepancies in either direction might drive perceptions of others' welfare gains or losses, fair or unfair treatment at the hand of sellers, or alternately, the judiciousness or moral acceptability of their spending (cf. Berman et al, 2020; Hagerty et al, 2022; Hagerty & Barasz, 2020; Olson et al, 2016). Further work may better clarify how zero‐sum thinking, others' valuations, and attributions of responsibility relate.…”

“…Does "unfair" Together with research demonstrating that lay people often overestimate others' WTP (Frederick, 2012;Jung et al, 2020), these findings also suggest the possibility that relative to consumers' own egocentric valuations, price discrepancies in either direction might drive perceptions of others' welfare gains or losses, fair or unfair treatment at the hand of sellers, or alternately, the judiciousness or moral acceptability of their spending (cf. Berman et al, 2020;Hagerty et al, 2022;Hagerty & Barasz, 2020;Olson et al, 2016). However, economic experts regard price discrimination based on WTP as welfare-enhancing for all consumers: earning higher margins from upgraded services for wealthy consumers allows firms to accept thinner margins and serve poorer consumers than they otherwise could (Chintagunta et al, 2003;Choudhary et al, 2005;DellaVigna & Gentzkow, 2019).…”

Plant power: SEEDing our future with plant‐based eating

“…Such difficulties are magnified when consumers, especially seniors, do not have reliable personal transportation and must rely on public transportation, which makes the commute to access affordable and healthy food longer and the return home carrying bags of groceries more arduous. Research in consumer psychology makes it clear that people are keenly aware of and negatively impacted by their own discrepancy in access relative to that of other consumers (Hagerty et al, 2022; Henderson et al, 2011; Nikiforidis et al, 2018; Shrum, 2022). Motivated by their values and a desire to protect people who are vulnerable, some communities, organizations, and consumers are taking action to bridge the gaps and increase healthy food access.…”

Psychological Effects of Economic Inequality

“…In the target article of this Research Dialogue, Goya-Tocchetto and Payne (2022) describe the many different psychological effects of economic inequality, reviewing their program of research that documents how inequality shapes individual perceptions, expectations, desires, and actions. In their commentary, Hagerty, Barasz, and Norton (2022) further this discussion by considering how economic inequality not only affects how individuals perceive and behave in their own lives, but also affects how they view and behave toward others, particularly in terms of others' purchase behaviors and consumption decisions. Finally, in their commentary, Ordabayeva and Lisjak (2022) provide a roadmap for consumer psychologists to build on Goya-Tochetto and Payne's research by proposing a three-step framework for the role of the marketplace in shaping consumer perceptions and behavioral responses to economic inequality.…”