Actuarial science

Mathematics

Social inequality

Mathematical analysis

Economics

Inequality

Economic inequality

Economic risk

Proceedings of the National Academy of Sciences

Significance Income inequality is rising around the world. Increased income inequality has been linked with higher rates of crime, greater debt, and poorer health, but the mechanisms linking inequality to poor outcomes among individuals are poorly understood. This research tested a behavioral account linking inequality to individual decision making. The account suggests that more unequal outcomes lead people to perceive that they need more resources to be satisfied. Higher perceived needs, in turn, motivate greater risk taking to meet those needs. Results of three experiments and an analysis of large-scale internet search data supported the proposed account. Results suggest that inequality may promote a range of poor outcomes, in part, by increasing risky behavior.

Economic inequality increases risk taking