The Salience of Economic Inequality Optimistically Biases Financial Risk Perception by Eliciting Anger

Abstract

The issue of economic inequality has grown in prominence in recent years. Consequently, consumers are likely to be reminded of economic inequality with increasing frequency—by traditional or social media, interpersonal or intergroup interactions, or situational or environmental cues. Yet little research has investigated the effect of economic inequality on consumer behavior or psychology. The present research seeks to address this gap in research by exploring how the salience of economic inequality affects consumers perception of risk in the financial domain, an important domain for promoting consumer welfare. Based on a review of relevant literature, this research proposes that economic inequality will be perceived as unjust and its salience will induce anger, which in turn will lead consumers to perceive lower levels of financial risk. Indeed, the results from three studies show (1) that anger is the predominant emotional response to economic inequality, and (2) that the salience of economic inequality induces anger and (3) reduces perception of financial risks (i.e., optimistically biases financial risk perceptions).