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DOI: https://doi.org/10.34069/AI/2022.55.07.32
How to Cite:
Davydov, I., Nikolskaya, A., Podbiralina, G., Mrochkovsky, N., & Chuvilova, O. (2022). Socio-economic inequality and
altruism. Amazonia Investiga, 11(55), 306-317. https://doi.org/10.34069/AI/2022.55.07.32
Socio-economic inequality and altruism
Социально-экономическое неравенство и альтруизм
Received: July 1, 2022 Accepted: August 30, 2022
Written by:
Ilkhom Davydov139
https://orcid.org/0000-0002-1979-4053
Anastasia Nikolskaya140
https://orcid.org/0000-0001-8821-5177
Galina Podbiralina141
https://orcid.org/0000-0002-1281-0508
Nikolay Mrochkovsky142
https://orcid.org/0000-0001-8453-3944
Oksana Chuvilova143
https://orcid.org/0000-0002-6702-2605
Abstract
The article addresses the attitudes to inequality in
the Russian society depending on the role of the
individual in a reference group. It is shown that
people are ready to accept significant income
inequality if they believe that the income is well
earned. No correlation was found between
subjective well-being and inequality. The vast
majority of people compare themselves with
friends, neighbours and relatives. The next most
important reference group is colleagues,
followed by celebrities. The rejection of
representatives of lower social classes is
negatively correlated with life satisfaction. At the
same time, the respondents expressed
willingness to build a society where, having due
means, people would organise help to those who
cannot provide for themselves.
Keywords: inequality, altruism, charity, views
of income inequality.
Introduction
One of the issues in contemporary economic
theory is population inequality and well-being
(Nusratullin et al, 2019; Vishnever et al., 2019),
139
PhD in Economics, Branch of the Russian State Social University in Osh, Kyrgyz Republic.
140
PhD in Psychology, Kosygin Russian State University, Russia.
141
PhD in Economics, Plekhanov Russian University of Economics, Russia.
142
PhD in Economics, Plekhanov Russian University of Economics, Russia.
143
PhD in Economics, North-Caucasus Federal University, Russia.
as well as the impact of some people’s income on
others’ perception of personal well-being. There
are two main types of individual attitudes to
Davydov, I., Nikolskaya, A., Podbiralina, G., Mrochkovsky, N., Chuvilova, O. / Volume 11 - Issue 55: 306-317/ July, 2022
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income distribution in the society. The first
approach can be viewed as the individual’s
disinterested assessment of income inequality
(normative assessment of inequality). Inequality
in standard treatment is assessed by the
individual regardless of where he/she is within
the distribution level, or even whether he/she is
present at all in this system or not. The second
approach, in the context of relative positioning,
will depend critically on the control group that
the individual has in mind. This group may
include two subgroups: relative (comparative)
reference group which serves as a standard for
comparison in terms of self-assessment, and
standardised reference group which is a source of
norms, attitudes and values of concerned
individuals. The relative reference group is a
point of comparison that allows for identifying
the individual’s own status when he/she is part of
a group. The standardised reference group
includes those whose attitudes constitute a
coordinate system for the individual (Merton &
Rossi, 1968).
The individual’s response to income inequality
will depend both on the role adopted by the
reference group and on the status of his/her
membership of the group. The individual’s well-
being, in the relative reference group of which
he/she is a member, usually keeps to the position
that one is negatively influenced by those who
earn more than him/he, while positively
influenced by those who earn less. Relative
reference groups can also influence one’s
behaviour, even if the individual is not currently
a member of the group. If the individual aspires
to become part of the group in question, then the
comparison with wealthier individuals in the
group can trigger positive emotions since the
individual expects to become as well-to-do as the
other group members, when he joins the group.
This idea of relative reference group towards
which the individual aspires is akin to the
Hirschman-Rothschild’s tunnel effect (1973).
The article explores the attitudes to inequality in
the Russian society depending on the role of the
individual in a reference group. The study
revealed that:
− people are prepared to accept significant
income inequality if they believe that the
income is well earned;
− no correlation between subjective well-
being and inequality was found;
− the vast majority of people compare
themselves with friends, neighbours and
relatives. The next most important reference
group is colleagues, followed by celebrities;
− negative attitudes towards members of lower
social classes correlate negatively with life
satisfaction. At the same time, respondents
expressed willingness to build a society
where, having due means, people would
organise to help those who cannot provide
for themselves.
Literature Review
A substantial body of papers appeared lately
considering the relationship between income and
well-being, where the authors construct their
concepts realising the significance of the
Easterlin et al., (2010) paradox. The individual’s
perception of inequality may depend on his/her
position in the income distribution. At any given
time, richer people tend to be happier than poorer
people. However, since GDP per capita increases
over time, Easterlin et al., (2010) suggested that
the average subjective level of welfare remains
constant in many countries. The extent to which
subjective well-being remains actually
permanent over time is a subject of quite heated
debate (Bloch et al., 2004). The comparison of
individual’s income or consumption with that of
others (or with own income in the past) is often
proposed as an explanation for this paradox.
There are many ways to show that the
individual’s well-being depends negatively on
the income of others, which has been shown
empirically by numerous scholars (Brown et al.,
2008; Brown et al., 2011; Heffetz, 2011).
Natural experiments may serve as the most
convincing evidence in this respect, where the
income or consumption of the control group
varies randomly. Some of these experiments are
adduced below.
Card et al., (2012) describe the following
experiment. According to a California court
ruling, the information about any state
employee’s salary became publicly available.
The local newspaper set up a website facilitating
the search for this information. After launching
this website, the researchers informed a random
group of employees at three California campuses
about this site. Several days after, all employees
at the three campuses were questioned. The study
revealed that being informed about others’
earnings reduced the subjective well-being of
those found to be relatively less well paid than
others in their reference group, and increased it if
they were found to be paid more. The survey in
fact revealed lower job satisfaction in people paid
below the average in their reference group and
their greater intention to seek new employment.
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The effect of both of these variables on people
relatively well paid was not significant.
Kuhn et al., (2011) described the following
situation. A zipcode lottery is regularly held in
the Netherlands. Every week, this lottery
randomly selects a zipcode and distributes a prize
of €12,500 for a lottery ticket acquired within the
zipcode area. In addition, one of the participating
households in the zipcode-winner area receives a
new BMW car. These zipcode areas are small
and constitute about 20 households on the
average. The people who do not live in the
winning zipcode area and those who did not buy
a ticket receive nothing. The households in the
winning zipcode areas were surveyed six months
after receiving the prize. One of the key findings
of the article is that people non-participating in
the zipcode lottery (those living next door to the
winners) were more likely to have bought a new
car since the lottery date than the other non-
participants. This suggests that people compare
their well-being with their neighbours and buy a
new car as a symbol of welfare.
The following example of natural experiment is
the one in which the comparison with a baseline
position or expectation influences the observed
behaviour. In New Jersey, police unions
negotiate their salaries with their municipal
employer and, in the event of of a dispute, an
outside arbitrator takes the final decision. Mas
(2006) concluded that the number of crimes
cleared per capita is 12% higher when the trade
unions win cases, compared with the situations
when they lose.
Natural experiments of this kind are relatively
rare. Instead, most studies aim at obtaining
survey data and modelling subjective welfare as
a function of individual’s own income and that of
a likely reference group. The latter reference
group is almost always imposed by the researcher
as some measure of income obtained, for
instance, by people of the same gender, age and
education, or those living in the same region or
working for the same firm. Direct information
about the people in the individual’s reference
group is very infrequent in survey data (Clark &
Senik (2010) is an exception).
Clark & Oswald (1996), using the data from the
British Household Panel Survey (BHPS),
showed that the estimated valuation multiples for
people’s own income and income of others in the
job satisfaction equation are statistically equal
and vice versa. Similar findings were obtained by
Ferrer–i–Carbonell (2005) who analysed the
national socio-economic surveys (SOEP) in
Germany, as well as by Luttmer (2005), who
based his findings on the US National Family and
Household Survey.
The above studies refer to relative reference
groups of which the individual is a member.
However, a different situation is possible, when
income increases in a comparative control group
to which the individual aspires, but of which
he/she is not yet a member. Some papers in fact
show that individual well-being is positively
correlated with the income of the reference
group, and they attempt to interpret this
correlation in terms of aspirations and future
results. The positive correlation between one’s
own well-being and the income of others is
consistent with the Hirschmann’s tunnel effect
where the others’ income provides information
about one’s own future prospects.
Clark & Oswald (1996) noted a positive effect of
other people’s welfare on subjective well-being.
In these cases, the measure of other people’s
income contains some element of the
individual’s likely future prospects. And this
influence is higher to the extent of probability of
one’s joining a reference group. As an example,
the work by (Clark & Senik (2010)) shows, using
the data from a representative sample, that people
were initially content with the higher income of
others (closer to the upper limit of income
distribution) since it was supposed that this was
to reflect their own future opportunities. Once it
becomes clear that only some relatively few
people will actually be able to access such
income, the satisfaction correlation becomes
more comparable to the net negative effect in
subsequent years of the sample. Similarly, one’s
income may be compared with the income of
those who are poorer, i.e. those who are worse
off.
One of the shortcomings of the studies described
above, in our opinion, is that the researchers
always make assumptions only for a proper
reference group, with obvious consequences for
precise measurement of relevant income
differences.
Below, some works on subjective well-being are
addressed. D'Ambrosio & Frick (2007, 2012)
show in their papers that subjective welfare
depends more on a measure of relative
deprivation than on absolute income, since the
correlation between income satisfaction and
absolute income is 0.357, whereas the correlation
between subjective well-being and relative
deprivation is 0.439. Thus, individual welfare is
estimated as a function of advantageous and
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disadvantageous inequality in a control group.
Bossert et al., (2007) introduce time as additional
dimension in assessing the individual’s level of
deprivation. They suggest that a person’s sense
of relative deprivation presently depends on
comparison with those who are better off. In
addition, they adduce an additional
consideration: the feeling of deprivation towards
someone who has higher income today is more
pronounced if the latter person was not better off
than the person in question on the previous day.
Stated differently, relative deprivation is sensed
more keenly in comparison to those who
outdistanced the person in income distribution
within the period from yesterday to today.
Individual well-being is negatively influenced by
comparison with those who are consistently
richer, and positively – by comparison with those
who are permanently poorer. At the same time, it
can be asserted that the presence of new richer
and poorer people plays the informational role
described in the tunnel effect. The one who is
richer than me today but was poorer than me
yesterday gives me a positive signal about my
own future prospects. Indeed, D‘Ambrosio &
Frick (2012) show that individual satisfaction is
positively correlated with such people’s income
today. Similarly, income gap with respect to
those who are now behind the individual but used
to be ahead of him/her reduces the person’s
satisfaction, which is consistent with the negative
signal that he/she may fall within this group
tomorrow.
In evaluation of well-being, altruistic behaviour
should be addressed as well, when giving one’s
own money to others increases the welfare not
only of the recipient, but also that of the donor.
The experimental approach described in Konow
& Earley (2008) shows that people showing high
scores on the subjective well-being scale are
subsequently more generous to others. A number
of essays provide evidence of the fact that both
tangible and intangible assistance to others has a
positive impact on subjective welfare (Aknin et
al., 2013; Kiffin-Petersen et al., 2012; Ricard,
2016). Dunn et al., (2008) in their study describe
the observed positive correlation between social
spending and subjective well-being, by making
an experiment in which some people have to be
generous. Aknin et al (2013) also concluded on
direct correlation between pro-social spending
and happiness: spending on social needs
increases the extent of happiness. Boehm &
Lyubomirsky (2009) show that people in the
experimental group who were asked to perform
three additional acts of kindness in a day
experienced sustained increased satisfaction
compared to the control group. Carpenter &
Myers (2010) show that volunteering also
generally leads to increased subjective well-
being.
It is interesting to note that self-assessment of
altruism is significantly correlated with all types
of volunteering, with the exception of volunteers
working with animals (Maki & Snyder, 2015).
An interesting area of research in this regard
covers charity. People donate on charity either
because they care about the recipients of their
generosity or because they derive some benefit
from the very process which is independent on
the focus of application of their charity
(Andreoni, 1989) calls this ‘impure altruism’).
Alternatively, philanthropy can be viewed as a
benefit that confers the status of benefactor on
the giver.
Konow (2010) shows in his research that giving
to others cannot be explained by altruism alone.
Konow (2010) calls for overarching role of
context-dependent norms in specifying the
notions of giving/bestowing to others, denoted by
him as fairness and need in his experiments.
Kranton et al., (2013) also emphasise that people
can be altruistic towards other people, but tend to
compare themselves and compete with others.
Below, within the scope of this study, the
reference groups in the Russian society and their
propensity for altruism is examined.
Methodology
A total of 1,745 people were interviewed, as part
of the quantitative research, in 44 regions of the
Russian Federation, aged 18 to 74, including
Moscow, regional centres and small towns in
Central Russia. The survey was conducted by
telephone interviewing. In addition, nine focus-
group sessions were conducted in Moscow,
Vladimir and Gus Khrustalny, with a total of 90
respondents (30 persons aged 20-30, students and
professionals with higher education, 30 persons
aged 35-55 with secondary education, 30 persons
aged 56+ having secondary education).
The study focused on identifying societal
attitudes towards inequality and values
underlying the attitudes towards inequality.
Results and Discussion
The economic indicators of inequality as
measured through the means of economic
statistics are not fully comparable with similar
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ones measured by sociological surveys.
However, even a rough comparison shows that
subjective perception of inequality has increased
significantly, much more than the one measured
objectively (Figure 1). This figure and below,
where the data are given in percentage terms,
shows the quantitative survey.
Figure 1. Assess how much each of the 5 forms of social inequality below is resented by you (economic
inequality results)
Source: received by the authors
The survey results show that economic inequality
is resented by the overwhelming majority of
respondents across all demographic groups. This
form of inequality is somewhat less resented in
the younger age group (79% of the respondents
are outraged, while it is most of all resented in
the 41-60 age group (85% of the respondents).
It is generally assumed in the reference group of
which the individual is a member that individual
well-being is negatively influenced by those who
earn more, but positively influenced by those
who earn less. It is therefore necessary to identify
the individual’s reference group.
We asked in the focus groups about whom people
compare their welfare with (colleagues,
neighbours, celebrities, officials, someone else).
The following answers were received: friends
and relatives, colleagues, neighbours, oligarchs,
famous bloggers. Next, this question was
included in the mass survey. The results are
presented in Figure 2.
Figure 2. Do you compare your financial well-being with others (reference groups)?
Source: received by the authors
4%
14%
40%
42%
not at all outraged rather not outraged rather outraged highly outraged
35,00%
17,00%
7,00%
34,00%
7,00% I do not compare
I compare with my
colleagues
I have difficulty answering
I compare with friends,
neighbours
I compare with celebrities
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This way we identified the reference groups and
the frequency of comparing oneself with a
reference group. The older the respondents, the
less frequently they compare themselves to
reference groups: 65% and up among the young
people to 45% among the elderly. The vast
majority of people compare themselves with
friends, neighbours and relatives. The next
important reference group is colleagues,
followed by celebrities (about 7% of the
respondents in all demographic groups compare
themselves with them). People with medium
level of education and low income compare
themselves with celebrities a bit more frequently,
which cannot but worsen their psychological
state which is reflected both in their subjective
assessment of own chance to success and in
evaluation of inequality level.
Figure 3 shows the rating assigned by Russians
to themselves in their reference groups.
Figure 3. If you compare your financial well-being with that of your environment, where do you rank
yourself on a scale from 1 to 5.
Source: received by the authors
Half of the surveyed people (50%) with low income
and having no higher education often rate their
position in own environment as low and very low.
As much as 4 per cent of low-income people, 14 per
cent of middle-income people and 24 per cent of
upper-middle-income people rate their position as
high or very high.
Thus, the main reference group is friends,
neighbours and relatives; the respondents who
assess their position in a reference group as low and
very low are 3.5 times more numerous than those
who assess their position as high and very high
(39% versus 11%).
Let us further reveal the attitudes towards the
members of other social groups, since the views on
income redistribution may be determined not by
financial interest, but by its impact on one’s social
position. For instance, if the decremented inequality
leads to influx of people from lower social classes
to a particular setting (neighbourhood), then this
influx will be opposed by those who do not want to
“mix” with people from these classes. The people’s
answers are presented in Figure 4.
13%
26%
50%
10%
1%
1 - I am at the far end of the line
2 -
3 -
4 -
5 - I am in the category of most well-to-do people
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Figure 4. If the decremented inequality leads to influx of people from lower social classes (including
migrants from undeveloped countries) into your neighbourhood, would you approve this /oppose this/ feel
neutral about it?
Source: received by the authors
The negative attitudes towards representatives of
lower social classes increase with people’s age;
these attitudes are worst in small towns and
cities, being best in Moscow; people with higher
education are more tolerant to lower social
classes than people with secondary education.
The respondents’ assessment of subjective well-
being is presented in Figure 5.
Figure 5. How satisfied are you with your life on a scale from 1 to 5 where 1 is – dissatisfied, 2 – rather
dissatisfied, 3 – moderately satisfied, 4 – rather satisfied and 5 – satisfied.
Source: received by the authors
Predictably, life satisfaction is lower among
people with low income. However, while
economic inequality is strongly resented by 82%
of the population, we were unable to find a
correlation between subjective well-being and
inequality. As much as 34% of those surveyed
were satisfied or rather satisfied with their lives,
while only 21% were dissatisfied or rather
dissatisfied. We attribute this to the fact that it is
not the economic inequality per se that is
resented by people, since, when asked “Do you
agree that inequality is unfair NOT in all cases”,
86% of the respondents gave an affirmative
answer. It is the corruption-based inequality,
generating close association with all sorts of
officials, that causes outrage. However, as far as
the vast majority of citizens are unable/unwilling
to engage in corruption (whereas officials are not
included in any normative comparison group
involving the respondents), no clear correlation
between inequality and subjective well-being is
observed.
Having identified the reference groups among
the Russians, their perception of own rank within
these groups and their attitudes towards members
of lower social classes, we shall further show
whether Russians behave altruistically towards
the others. In order to assess the extent to which
Russians are altruistic, we asked whether they
donate anything to charity, and about their
satisfaction with own income. The results are
presented in figures 6-7.
4%
28%
68%
0
pro contra neutral
5%
16%
45%
28%
6%
diissatisfied rather diissatisfied moderately satisfied rather satisfied fully satisfied
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Figure 6. Your current salary
Source: received by the authors
It can be seen that almost half of Russians
experience regular financial difficulties. In this
regard, the answers to the question about
donations look quite logical; it can be seen from
them that a similar proportion of respondents
experience financial difficulties and are unable to
donate anything.
Figure 7. Do you contribute anything for charity?
Source: received by the authors
Among those who donate regularly to charity,
those with above-average income, pensioners
and residents of regional centres stand out.
Among those who donate to charity occasionally,
the minimum is observed among people with low
income (32%), and the maximum – among those
with above-average income (41%). Men,
significantly more often than women (7% vs.
4%), believe that everyone should solve own
problems himself/herself. The highest share of
those who share this view is the people with
above-average incomes (11%). This can
probably be explained by the fact that these
people believe that they have achieved
everything on their own.
We got the following distribution of answers in
the focus groups:
1. Regularly – 3 persons.
2. Occasionally – 52 persons.
3. I am not in the position to – 23 persons.
4. I don't think it’s proper, everyone has to
solve own financial problems himself – 12
persons.
5%
41%
48%
6% 0
Allows you to live comfortably
Allows you to cope with difficulties
Does not let you cope, and you experience regular financial difficulties
I have difficulty answering
3%
35%
50%
6% 6%
regularly
sometimes
I am not in the position to
I don’t think it's proper, everyone has to solve own financial problems himself
I can give no definite answer
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After that, the motivation of those who donate to
charity (regularly or occasionally) was identified.
All of the respondents reported feeling
compassion for those in need (value motivation);
moreover, this way they sort of get rid of the
feeling of guilt for being in a better position
(protective motivation), or this makes them feel
a worthy person (self-improvement motivation).
The protective motivation was reported by 12
persons, the self-improvement motivation – by
43 persons.
Can one talk in this context that donation
behaviour represents an unconscious desire on
the part of Russians to reduce inequality in the
country? Probably, this is partly true. Why? The
indignation at the fact that people, and especially
children, have to collect money for medical
operations was repeatedly voiced in every focus
group. In this sense, our respondents rather
expressed indignation about social inequality in
the form of unequal access to social benefits
(education, medicine etc.). Strong resentment of
social inequality was expressed by 88% of the
survey respondents.
In this context, it is interesting to see what
Russians expect from the government. We asked
the respondents to rate each below statement on
a scale from 1 to 5 where: 1 – the government
should not address it, 5 – the responsibility for
this lies entirely with the government (see
Table 1).
Table 2.
Role of government in addressing inequality in the country
The government’s role to:
The –1
Government
should not address
this, %
2
3
4
The –5
responsibility for
this lies entirely
with the government
Reduce the income gap
3%
4%
17%
23%
53%
Give a chance to poor children
to get to the university
3%
2%
11%
24%
60%
Provide jobs for everyone who
wants it
1%
2%
10%
22%
65%
Ensure a decent living standard
for the unemployed
5%
10%
38%
21%
26%
Ensure a decent income level,
one for all
8%
9%
24%
20%
39%
Play a key role in protecting and
being -promoting economic well
of its citizens
1%
1%
9%
22%
67%
Ensure equal opportunities
1%
2%
11%
23%
63%
Ensure equitable distribution by
transferring money from the
richer to the poorer
8%
10%
22%
21%
39%
Ensure public responsibility for
those who are not able to
provide for themselves
independently
3%
6%
23%
26%
42%
The following ideas towards tackling the
inequality problem find maximum support of the
population: providing jobs for all who need them;
activating the deeds to protect and promote
economic well-being of citizens; giving poor
children a chance to enter the university,
ensuring equal opportunities.
In the above context, we are interested in the last
line of the table. Ass much as 68% of the
respondents agreed that the government should
“ensure public responsibility for those who are
not able to provide for themselves
independently”. In other words, the people
expressed willingness to build a society where,
given due means, people would organise help to
those who cannot provide for themselves.
Moreover, 48% of Russians already do this,
insofar as possible, donating to charity regularly
or occasionally.
Conclusions
The authors found that income inequality in the
country is resented by 82% of the respondents.
At the same time, people are ready to accept
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significant income inequality if they believe that
the income is well earned rather than acquired
through corruption. The vast majority of people
compare themselves with friends, neighbours
and relatives. The next most important reference
group is colleagues, followed by celebrities –
about 7% of the respondents in all demographic
groups compare themselves with them.
The most common reference group is represented
by friends, neighbours and relatives; the
respondents who assess their position in the
reference group as low and very low are 3.5 times
more numerous than those who assess their
position as high and very high (39% versus 11%).
Predictably, life satisfaction is lower among
people with low income. However, although
economic inequality is strongly resented by 82%
of the population, no correlation between
subjective well-being and inequality was found.
As much as 34% of those surveyed were satisfied
or rather satisfied with their lives, while only
21% were dissatisfied or rather dissatisfied. We
attribute this to the fact that it is not the economic
inequality per se that is resented by people, but
rather the corruption-based inequality, causing
close association with all sorts of officials.
However, as far as officials are not included in
any normative comparison group involving the
respondents, no clear correlation between
inequality and subjective well-being is observed.
At the same time, the number of people who do
not want to mix with people from lower social
classes (which could happen if the social
inequality is mitigated) accounts for 28%. The
negative attitudes towards members of lower
social classes are negatively correlated with life
satisfaction. That is, people who are dissatisfied
with life do not want to mix with those who live
even worse, reserving the right to believe that
they are superior to some other social group.
Almost half of Russians experience regular
financial difficulties. And almost as many,
regularly or occasionally, contribute to charity,
mainly out of compassion for those in need who
cannot afford to pay for a medical operation or
other expensive medical treatment. In this sense,
the donating behaviour can be viewed as an
attempt to reduce not economic, but social
inequality in the country.
Finally, 68% of the respondents agreed that the
government should “ensure public responsibility
for those who are not able to provide for
themselves independently”. In other words, the
people expressed willingness to build a society
where, given due means, people would organise
help to those who cannot provide for themselves.
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