Op/Ed Fridays: Americans’ distorted view of wealth

October 10, 2014 by Joshua
in Blog

I talk about mental models and beliefs and how they determine how you live.

Two researchers (“Building a Better America−−One Wealth Quintile at a Time,” Michael I. Norton and Dan Ariely, Perspectives on Psychological Science 2011 6: 9) asked Americans about their views on how wealth is distributed among Americans. The chart below summarizes some results.

The top bar, “Actual,” shows the distribution of wealth owned by each fifth of the population—the richest to the poorest. The blue bar shows that the richest own most of it. The poorest forty percent own so little it doesn’t show on the graph. It makes me wonder what the distribution of wealth was in, say, France before their revolution.

The next set of bars, labeled “Estimated,” shows how people in each fifth think the wealth is distributed. Everyone’s ideas are pretty similar, especially compared to the Actual distribution.

The last set of bars, labeled “Ideal,” shows how people in each fifth think the wealth should be distributed. Again, everyone’s ideals are pretty similar and differ yet more from the Actual distribution.

US Wealth Distribution Norton Ariely

In other words, we wish we lived in a world more equitable than we do yet live in one less equitable than we think we do. This double-misperception influences our lives, I suspect to sustain the misperception.

This version simplifies the above chart. We think we live in a world worse than we do, at least by what we want. Actually we live in a world far worse, at least if we consider farther from ideal worse. What are we doing to ourselves?

US Wealth Distribution Norton Ariely

Read my weekly newsletter

On initiative, leadership, the environment, and burpees

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

2 responses on “Op/Ed Fridays: Americans’ distorted view of wealth

Leave a Reply

Sign up for my weekly newsletter