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Absolute versus Relative Poverty and Wealth: Cooperation in the Presence of Between-Group Inequality

  • Eugenio Levi ORCID logo EMAIL logo and Abhijit Ramalingam
Published/Copyright: November 7, 2024

Abstract

While inequality in resource endowments has been shown to affect cooperation levels in groups, much of this evidence comes from studies of within-group inequality. In an online public goods experiment, we instead examine the effects of payoff-irrelevant inequality in resources between groups on cooperation within equal groups, i.e. the effect of mere exposure to inequality. When all groups are poor or rich, their contribution behaviour is very similar. Relative inequality, when poor and rich groups coexist, leads to lower contributions in rich groups. We find suggestive evidence that this may be related to stereotypes about the rich contributing less than the poor.

JEL Classification: C72; C91; C92; D63; H41

Corresponding author: Eugenio Levi, Department of Human Sciences, Link University, Rome, 00165, Italy; and Department of Public Economics, Masaryk University, Brno, 602 00, Czech Republic, E-mail:

Acknowledgments

The authors thank Lata Gangadharan, Shaun Hargreaves Heap, Anmol Ratan, Brock Stoddard, seminar participants at Masaryk University and at the Euregio Workshop 2022, and two anonymous referees for helpful comments and suggestions. Funding from Appalachian State University is gratefully acknowledged. This study has been exempted from review by the Institutional Review Board at Appalachian State University (Study No. 21-0106).

  1. Conflict of interest: None declared.

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Supplementary Material

This article contains supplementary material (https://doi.org/10.1515/bejeap-2024-0350).


Received: 2024-10-08
Accepted: 2024-10-08
Published Online: 2024-11-07

© 2024 Walter de Gruyter GmbH, Berlin/Boston

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