The Psychology of Inequality

Payne is now a professor at the University of North Carolina, Chapel Hill. He has come to believe that what’s really damaging about being poor, at least in a country like the United States-where, as he notes, even most people living below the poverty line possess TVs, microwaves, and cell phones-is the subjective experience of feeling poor. This feeling is not limited to those in the bottom quintile; in a world where people measure themselves against their neighbors, it’s possible to earn good money and still feel deprived. “Unlike the rigid columns of numbers that make up a bank ledger, status is always a moving target, because it is defined by ongoing comparisons to others,” Payne writes.

Feeling poor, meanwhile, has influences that go well beyond feeling. People who see themselves as poor or in need of money often make different decisions than those who don’t. They may engage in frugal activities more frequently as a means to increase their savings pool. Others take to side-hustles as a means of earning more money, an example being trading stocks or Waves kaufen tokens. They may frequently consult a budget before making any kind of decision. On the opposite end of the scale, people who see themselves as poor may instead increase their spending in order to be perceived as more affluent.

As the latter point suggests, those perceiving themselves as poor have been seen to often make poor financial decisions. For example, spending two bucks on a Powerball ticket, in the hopes of winning millions. However this tactic has roughly a one-in-three-hundred-million chance of paying out, which is never a good bet. Instead, you’re much better off playing lotto on a ?????? like this one as the chance of paying out can be significantly different. Or, if you are skilled at gambling games, you’re better off playing games such as online double bonus poker which is more skill-based than luck. Buying a Powerball ticket is especially ill-advised for those struggling to make ends meet. Yet low-income Americans buy a disproportionate share of lottery tickets, so much so that the whole enterprise is sometimes referred to as a “tax on the poor.”

One explanation for this is that poor people engage in riskier behavior, which is why they are poor in the first place. By Payne’s account, this way of thinking gets things backward. He cites a study on gambling performed by Canadian psychologists. After asking participants a series of probing questions about their finances, the researchers asked them to rank themselves along something called the Normative Discretionary Income Index. In fact, the scale was fictitious and the scores were manipulated. It didn’t matter what their finances actually looked like: some of the participants were led to believe that they had more discretionary income than their peers and some were led to believe the opposite. Finally, participants were given twenty dollars and the choice to either pocket it or gamble it on a computer card game, similar to those on Those who believed they ranked low on the scale were much more likely to risk the money on the card game. Or, as Payne puts it, “feeling poor made people more willing to roll the dice.”

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