The Wealth Effect: It Ain't Pretty

(Photo: Refracted Moments™)

A fascinating Boston Globe article by Britt Peterson reviews the research on the far-reaching psychological effects of wealth. “Rich people have a harder time connecting with others, showing less empathy to the extent of dehumanizing those who are different from them,” writes Peterson. “They are less charitable and generous. They are less likely to help someone in trouble.”  Even more depressing: These traits are “developed,”  not “inherited.”

While money may not be the root of all evil, it can make people “insensitive” according to Kathleen Vohs, one of the researchers whose work was profiled in the article. “When people are reminded of money, they get better at pursing their personal goals,” she explains. “On the negative side, they become poor at interpersonal functioning. They’re not all that nice to be around. They’re not openly mean or disagreeable, but they can be insensitive.”  

Also discussed in the article: research from Michael Kraus, Paul Piff, and Dacher Keltner which finds that lower-status people are more compassionate. “If your world is more unpredictable and threatening, and the police are more likely to arrest you, and you’re more likely to go to schools that don’t have the right kinds of resources, you’re going to be more attuned to the context around you,” explains Keltner. “And if [lower-status people are] more attuned to the environment and they’re tracking other people, it turns out they’re more compassionate, too, even at the physiological level.”

(HT: The Monkey Cage)

Scott Templeman (@tallbonez)

Hire better bloggers, as not kicking the tires on bad science is not very Freakonomics!


There does seem to be a basic problem with correlating make/model of car with wealth in a simple way. For instance, I'd expect a portion of the upmarket brands to have been purchased by people who're trying to project an image of wealth, but who are stressed out trying to keep up with the payments. On the other hand, there are probably a number of confident wealthy folks who drive what they like regardless of cost - Sam Walton's old truck being the classic example.

In the same way, I suspect a good bit of the "rich people are insensitive jerks" attitude is the emotional/economic equivalent of calluses. Suppose you are a person who's perceived to have money: you'll be dogged by people expecting you to give them a share of it, and if you consistently yield to the impulse, will wind up with no money left since the number of willing takers is for all practical purposes infinite.


I have observed everything found in this study to be mostly true with one exception... “They are less charitable and generous. They are less likely to help someone in trouble.” This does not match my personal interactions and experiences.


Keep in mind that generosity is typically considered relative to the inconvenience that it causes to the benefactor (the Widow's Mite story from the Bible is the first example that comes to mind). Sharing half your food when you do not know how/when you will be able to eat next, for instance, would be more generous than giving $10 billion out of your $50 billion to your charitable foundation.


I would be curious to see what traits are found with people at the very bottom of the distribution. I bet they might exhibit some of the same characteristics. Possibly for different reasons, but I doubt people who are poor are the most generous and least greedy.


With all the Freakonomics discussion about political bias, this has got me to be thinking. Isn't this just another way of saying poor people are liberals and Democrats while rich folks are more likely to be conservatives and Republicans? Add in a liberal bias that compassion is good and tough love is bad and there you have it.

“On the negative side, they become poor at interpersonal functioning. They’re not all that nice to be around. They’re not openly mean or disagreeable, but they can be insensitive.” For example, would this refer to me walking past a panhandler and not giving knowing that the money would likely subsidize an alcoholic who may need some mental health treatment?


Except it's not true. Lower-middle class working people make up the majority of the Republican party, while richer/higher educated people are more likely be Democrats. Until you hit a line near the very top. And then you're still more likely to be a Democrat at the very top unless your money comes from the financial, oil, or defense sectors.


Do you have data to support this or are you just speaking out of what you observe through your bias (everyone is bias, mind you) lens?


It's not the truly wealthy that are less charitable and generous, it's those that aren't but want everyone to think that they are. Most of the millionaires that I have met are very compassionate and generous, and generally you wouldn't know that they are rich. Read "The Millionaire Next Door" , those are the type of people that I am thinking of and that I have met.

No, it's the "wanna be's", the ones that have a flashy car, huge home, and maxed out credit that fit the profile described. They are the ones that you have issues with.

As for the comment about political affiliation, you should read
"Who really cares : the surprising truth about compassionate conservatism : America's charity divide--who gives, who doesn't, and why it matters" by Arthur C. Brooks. It's an eye opener. In a nutshell, Republicans are generous with their own money, Democrats are generous with other peoples money. It's a good read.


Shane L

Fascinating stuff as usual.

One question: since most people in developed countries are richer than most of world's population, are they also afflicted with the traits of the rich? Or are those traits associated only with the RELATIVELY rich, those who are separate from their neighbours by virtue of their wealth?


Let's also not forget the Attack of the Killer Algorithms that keep the wealth rich. Most don't understand this that have money but it's what attacks the non rich and moves money and a lot of this data is becoming flawed today.

Yes they have the money but the fear of being attacked like the middle class is certainly there as well so less charity as I see it.


Just from personal experience, there seems to be an intermittent step that's more telling. It's the exclusion caused by wealth. The wealthy will naturally seclude themselves from lower socioeconomic classes based on being able to afford luxury, e.g. live in gated communities, dine at fine restaurants, etc., and the lack of interaction with individuals or families on a personal level, and day-to-day, tends to develop a lack of compassion.

As it relates the Globe article mentioned and whether that affects the way our politicians think and govern, I would assume for most it does. If an individual is making high six figures, possibly seven figures, yearly, while spending their days sitting on Capitol Hill, dining and schmoozing with lobbyists at exclusive restaurants in Woodley Park, living in a nice home in Georgetown, frequenting black tie events, and so on, what do you think the effect is on one's ability to empathize with the less fortunate? It requires a vigilant individual to constantly remind themselves of the daily struggles of the average citizen while living the aforementioned lifestyle. Now assume that they came from privilege or generated great wealth before even arriving in Washington, how many years are they removed from worrying about personal finances? How few recent experiences do they have where their family, friends, and work cohorts, have struggled?

The ability to empathize or sympathize with financial struggle, and act on it, is proportional to an individual's own experience with it (or lack thereof).



"The wealthy will naturally seclude themselves from lower socioeconomic classes based on being able to afford luxury, e.g. live in gated communities, dine at fine restaurants, etc..."

I suggest you are confusing cause and effect here. Some people want to live in gated communities, but can only do so if they have enough money. The bar is not all that high, either. There are a number of gated communities hereabouts with houses in the median price range. Indeed, a quick search turns up several gated mobile home communities.


Money has never been the root of all evil.

It's the LOVE OF MONEY that the Bible says is the root of all evil. And now we just have more evidence that, indeed, those who love it too much become evil jerks.

Hexe Froschbein

"Rich people have a harder time connecting with others, "

Rich people are more discerning about whose company they keep, often due to the envy and opportunism of people in general. And usually rich people are rich because they are educated to a high level and apply themselves, and as everyone else in this world look to be with their peers who share the life experiences they have.

"showing less empathy to the extent of dehumanizing those who are different from them,”

We need to know more here. 'Show less empathy' -- how was this determined? Less empathy than whom? How much is 'less'?

And what constitutes 'dehumanising' and why is such an inflammatory language used which shows very little empathy to the subjects and verbally dehumanises them as 'dehumanisers'?

"writes Peterson. “They are less charitable and generous. "

Yes, they have the gumption to say 'no' to moochers and then to remove them from their life. Often they also say 'no' to themselves a lot, because 'having is a consequence of "keeping"' , that's why they are 'rich'. Btw, for most envy mongers who cannot budget properly, 'rich' actually just means comfortably off, on a scale where their evil, greedy landlord is viewed as rich as the Sultan of Brunei.

"They are less likely to help someone in trouble.”

Probably because they choose their friends carefully and pick people who do not need parenting.

"Even more depressing: These traits are “developed,” not “inherited.”

So, in other words, being wealthy is a form of acquired, deliberate anti-social behaviour?

(any lower bids?)



"In a particularly disturbing part of one study, the team primed people with money, then gauged their empathy by eliciting reactions to a theoretical scenario involving a belligerent homeless person"

I'd be especially interested in the details of that remark.

The whole study carries the odor of academics upset that there are all these rich people who aren't as smart or, well, as good as they are. Get a life. Those who can't, teach.


When a researcher from a left-leaning institution is studying the 'rich', males, whites, etc., the conclusions about those groups will not be positive. It's called 'The Lefty Researcher Effect'.


As my net worth grows, my charitable giving grows. I'm not wealthy but as a multi-thousandaire I try to give where I can.

Jon Schell

I think what they're missing is that a lot of that also comes from how people treat those with money differently than when they didn't have money. They're still just people, but they get treated as just a money bank. It would make anyone more insensitive.