Does Inequality Cause a Difference in Altruism Between the Rich and the Poor? Evidence from a Laboratory Experiment

Increasing research evidence indicates that economic inequality leads the rich to be less generous than the poor. While compelling, the underling mechanism of the finding remains elusive. We conduct a laboratory experiment to investigate how inequality influences people’s behavior in a sharing game. We test varying causes of inequality to see how people share payoffs with others when inequality is caused respectively by chance, competition, and choice. The experiment result shows that the rich give less than the poor only when inequality is self-chosen. Yet, different from findings in previous studies, increasing inequality does not reinforce, but instead mitigates the negative relationship of income and giving. Our study suggests that research on the consequences of inequality should be careful on discerning whether self-choice of inequality could account for the spurious effect of inequality on people’s prosocial behavior.