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Inequality and Relative Ability Beliefs

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  • Jeffrey V. Butler
Abstract
In this study I present experimental evidence of a novel channel yielding inequality persistence. In an initial experiment, results suggest that individuals respond to salient inequality by adjusting their performance beliefs to justify the inequality. Subsequent experiments reveal: i) that it is beliefs about relative ability, an ostensibly stable trait, rather than effort provision that respond to inequality; and that ii) unequal pay in an initial task affects willingness to compete on a subsequent task for male participants. Taken together, these patterns may cause inequality to become self-perpetuating. I conclude by discussing some implications of these findings.
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Suggested Citation

  • Jeffrey V. Butler, 2016. "Inequality and Relative Ability Beliefs," Economic Journal, Royal Economic Society, vol. 126(593), pages 907-948, June.
    • Handle: RePEc:wly:econjl:v:126:y:2016:i:593:p:907-948
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    File URL: http://hdl.handle.net/10.1111/ecoj.2016.126.issue-593
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    1. Uri Gneezy & Kenneth L. Leonard & John A. List, 2009. "Gender Differences in Competition: Evidence From a Matrilineal and a Patriarchal Society," Econometrica, Econometric Society, vol. 77(5), pages 1637-1664, September.
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    6. Sarah F. Brosnan & Frans B. M. de Waal, 2003. "Monkeys reject unequal pay," Nature, Nature, vol. 425(6955), pages 297-299, September.
    7. David Eil & Justin M. Rao, 2011. "The Good News-Bad News Effect: Asymmetric Processing of Objective Information about Yourself," American Economic Journal: Microeconomics, American Economic Association, vol. 3(2), pages 114-138, May.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Entrenching inequality
      by chris dillow in Stumbling and Mumbling on 2013-04-04 19:11:33
    2. On endogenous preferences
      by chris dillow in Stumbling and Mumbling on 2013-05-06 17:51:02
    3. Bosses pay: the right's problem
      by ? in Stumbling and Mumbling on 2016-08-09 18:14:00
    4. Grammar schools & stereotype threat
      by ? in Stumbling and Mumbling on 2016-09-16 18:22:00

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    Cited by:

    1. John Ifcher & Homa Zarghamee & Carol Graham, 2019. "Income inequality and well-being in the U.S.: evidence of geographic-scale- and measure-dependence," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(3), pages 415-434, September.
    2. John Ifcher & Homa Zarghamee & Dan Houser & Lina Diaz, 2020. "The relative income effect: an experiment," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1205-1234, December.
    3. Norma Burow & Miriam Beblo & Denis Beninger & Melanie Schröder, 2017. "Why Do Women Favor Same-Gender Competition? Evidence from a Choice Experiment," Discussion Papers of DIW Berlin 1662, DIW Berlin, German Institute for Economic Research.
    4. Cardella, Eric & Roomets, Alex, 2022. "Pay distribution preferences and productivity effects: An experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    5. Gonzalez Jimenez, Victor, 2016. "Believe Me, You are (not) that Bad," Other publications TiSEM 25ded0a5-f9c2-48d9-befe-5, Tilburg University, School of Economics and Management.
    6. Suss, Joel, 2023. "Measuring local, salient economic inequality in the UK," LSE Research Online Documents on Economics 117884, London School of Economics and Political Science, LSE Library.

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