Economic Inequality Is Linked to Biased Self-Perception

Abstract

People's self-perception biases often lead them to see themselves as better than the average person (a phenomenon known as self-enhancement). This bias varies across cultures, and variations are typically explained using cultural variables, such as individualism versus collectivism. We propose that socioeconomic differences among societies--specifically, relative levels of economic inequality--play an important but unrecognized role in how people evaluate themselves. Evidence for self-enhancement was found in 15 diverse nations, but the magnitude of the bias varied. Greater self-enhancement was found in societies with more income inequality, and income inequality predicted cross-cultural differences in self-enhancement better than did individualism/collectivism. These results indicate that macrosocial differences in the distribution of economic goods are linked to microsocial processes of perceiving the self.

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Psychological Science
22(10) 1254 –1258
© The Author(s) 2011
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DOI: 10.1177/0956797611417003
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People often display a rosy bias in their self-perception. This
self-enhancement bias is the tendency to emphasize or exagger-
ate one’s desirable qualities relative to other people’s (Alicke,
1985; Guenther & Alicke, 2010). The magnitude of this bias
varies across cultures, with people reporting higher levels of
self-enhancement in some nations (e.g., the United States) than
in others (e.g., Japan). These variations have been subject to
extensive cross-cultural examination and debate centering on
whether the desire to self-enhance is common to all people
(Sedikides, Gaertner, & Toguchi, 2003; Sedikides, Gaertner, &
Vevea, 2007) or stronger among Westerners, particularly North
Americans, than among Easterners (Heine, 2003; Heine,
Kitayama, & Hamamura, 2007; Heine, Lehman, Markus, &
Kitayama, 1999). In a recent meta-analysis, Heine et al. (2007)
found that 79 of 81 studies showed that Westerners were signifi-
cantly more likely to self-enhance than Easterners.
The prevailing explanation of cross-cultural variability in
levels of self-enhancement invokes the cultural dimensions of
individualism and collectivism (Boucher, 2010; Chiu, Wan,
Cheng, Kim, & Yang, 2010; Triandis, 1995) and the associated
concepts of independence and interdependence (Heine et al.,
1999; Oyserman, Coon, & Kemmelmeier, 2002). Theorists
argue that Westerners are more likely to be individualists who
seek personal success and uniqueness, and thus self-enhance
more than do Easterners, who are more likely to be collectiv-
ists seeking interpersonal harmony and belonging (Boucher,
2010; Heine & Hamamura, 2007). We propose an alternative
explanation that favors socioeconomic differences over cul-
tural dimensions. We suggest that the extent to which people
engage in biased self-perception is influenced by the economic
Corresponding Author:
Steve Loughnan, University of Kent, Canterbury, Kent CT2 7NZ, United
Kingdom
E-mail: s.loughnan@kent.ac.uk
Economic Inequality Is Linked to
Biased Self-Perception
Steve Loughnan1,2, Peter Kuppens1,3, Jüri Allik4,5, Katalin Balazs6,
Soledad de Lemus7, Kitty Dumont8, Rafael Gargurevich9, Istvan
Hidegkuti6, Bernhard Leidner10, Lennia Matos9, Joonha Park1,11,
Anu Realo4, Junqi Shi12, Victor Eduardo Sojo13, Yuk-yue Tong14,
Jeroen Vaes15, Philippe Verduyn3, Victoria Yeung16, and
Nick Haslam1
1University of Melbourne; 2University of Kent; 3University of Leuven; 4University of Tartu; 5Estonian Academy of Sciences,
Tallinn, Estonia; 6University of Debrecen; 7Universidad de Granada; 8University of South Africa; 9Universidad Peruana
de Ciencias Aplicadas; 10University of Massachusetts, Amherst; 11University of Tokyo; 12Peking University;
13Universidad Central de Venezuela; 14Singapore Management University; 15University of Padova; and 16University of Hokkaido
Abstract
People’s self-perception biases often lead them to see themselves as better than the average person (a phenomenon known
as self-enhancement). This bias varies across cultures, and variations are typically explained using cultural variables, such as
individualism versus collectivism. We propose that socioeconomic differences among societies—specifically, relative levels
of economic inequality—play an important but unrecognized role in how people evaluate themselves. Evidence for self-
enhancement was found in 15 diverse nations, but the magnitude of the bias varied. Greater self-enhancement was found in
societies with more income inequality, and income inequality predicted cross-cultural differences in self-enhancement better
than did individualism/collectivism. These results indicate that macrosocial differences in the distribution of economic goods
are linked to microsocial processes of perceiving the self.
Keywords
self-perception, self-enhancement, income inequality, culture, self-esteem, sociocultural factors, socioeconomic status
Received 1/5/11; Revision accepted 6/5/11
Research Report
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Economic Inequality and Biased Self-Perception 1255
structure of their society, specifically its level of economic
inequality.
Societies differ in their degree of economic inequality. In
unequal societies, wealth is concentrated at the top, disadvan-
tage at the bottom is extreme, and differences in social stand-
ing are highly salient (Kerbo, 2011; Wilkinson & Pickett,
2010). Accordingly, in unequal societies, individuals are
strongly motivated to stand out as superior to others. One
expression of this desire may be to engage in stronger self-
enhancement. In societies with more economic equality, the
benefits of superiority diminish, and people’s tendency to see
themselves as above average should weaken. Indirect evidence
that income inequality may be linked to self-enhancement
comes from existing cross-cultural research. Japan and the
United States—prototypical collectivist and individualist
nations, respectively—also markedly differ on income equal-
ity. Among developed nations, Japan is one of the most equal
and the United States is one of the least equal (Wilkinson &
Pickett, 2010). The reliable difference in levels of self-
enhancement observed between these two nations may be a
function not only of individualism versus collectivism, but
also of covarying differences in each society’s degree of eco-
nomic equality.
Income inequality may foster greater self-enhancement
through increased competition. Takata (2003) found that when
Japanese participants were asked to compete over a limited
resource under zero-sum conditions (i.e., the winner receives
everything, the loser nothing), they displayed levels of self-
enhancement similar to the levels displayed by Americans.
That is, when people compete over concentrated rewards, they
have a tendency to self-enhance. Because economic inequality
polarizes benefits and costs and emphasizes hierarchy, people
living in societies with high income inequality may see social
relations as similar to zero-sum competitions. Thus, people in
such societies should be particularly prone to self-enhancement,
independent of levels of individualism.
The role of socioeconomic factors in understanding cross-
cultural differences has been increasingly recognized by
researchers (Kitayama & Uskul, 2011; Oyserman & Lee,
2008). Demographic and economic differences between soci-
eties (e.g., population size, market integration) are predictive
of social relationships. Socioeconomic differences explain
cross-cultural variation in the extent to which people cooper-
ate, exploit, and punish others (Henrich, Ensminger, et al.,
2010; Marlowe et al., 2008). Although recent work has linked
differences in social relations to socioeconomic factors,
researchers have not examined how these differences might be
related to perceptions of the self. We contributed to this emerg-
ing field by examining the association between economic
inequality and biased self-perception.
In the study reported here, we investigated whether socio-
economic differences might be related to biased self-perception.
Specifically, we expected economically unequal societies to
be associated with an increased tendency to see the self as bet-
ter than others (self-enhancement). We expected the effect of
income inequality to be distinct from and more powerful than
the effect of cultural differences in individualism and
collectivism.
Method
We gathered data from 1,625 participants in five continents
and 15 nations: Europe (Belgium, Estonia, Germany,
Hungary, Italy, Spain), the Americas (Peru, the United States,
Venezuela), Asia (China, Japan, Singapore, South Korea),
Africa (South Africa), and Oceania (Australia). In 14 coun-
tries, participants were recruited from student populations at
universities; in the United States, nonstudent participants were
recruited online. Participants either volunteered, received
course credit, or received payment. The samples varied in size
(n = 80–260 per country), and participants were predominantly
young (mean age = 21.55 years, SD = 5.80 years), with more
females (67%) than males (33%).
Participants completed a standard questionnaire assessing
self-enhancement. All questionnaires were translated into the
native languages of the participants and back-translated for
equivalence. The questionnaire asked participants to rate a set
of personality traits and values on two dimensions. The first
dimension, “How much do you possess this characteristic
compared to the average student” (or “How much do you pos-
sess this characteristic compared to the average person” in the
U.S. sample), was rated on a 7-point scale ranging from 1,
much less than the average student/person, to 7, much more
than the average student/person. The second dimension, “This
characteristic is desirable, it is a characteristic that people gen-
erally want,” was rated on a 7-point scale ranging from 1,
not at all, to 7, very much so. The traits were selected on
the basis of previous research to cover all domains of the
Schwartz Value Survey (Schwartz, 1992) and the Big Five
personality factors (Haslam, Bain, Douge, Lee, & Bastian,
2005; Loughnan et al., 2010). For each language, four versions
of the questionnaires were prepared. Participants randomly
received one version. The questions on each version were
identical, but the traits that participants were asked to rate dif-
fered. To reduce the amount of time required to complete the
questionnaire, we included only 20 personality traits and val-
ues on each version, and this resulted in 80 personality traits
and values being rated across the sample.
Societal indices were compiled from freely available
sources. National levels of individualism, collectivism, and
power distance (the extent to which people prefer an autocratic
hierarchy versus a relative equality of power) were drawn
from previous work (Hofstede, 2001). To assess economic
inequality, we used national Gini coefficients, which gauge the
income distribution within a society; as calculated by the
United Nations, a Gini value of 100 means that a single indi-
vidual receives all of the income (perfect inequality), and a
Gini value of 0 means that income is evenly distributed across
the population (perfect equality). Thus, higher values indicate
greater inequality. Gini values were taken from the United
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1256 Loughnan et al.
Nations Human Development Report (United Nations Human
Development Programme, 2010).
Results
Data were analyzed using multilevel modeling. Two-level
multilevel regression models (with traits nested in persons)
were estimated to obtain an average and separate random
intercept and slope value for each nation. Three-level models
(with traits nested in persons nested in nations) were estimated
to examine the moderating role of income inequality and indi-
vidualism/collectivism in self-enhancement. Both age and
gender significantly moderated self-enhancement (age: b =
0.003, p = .044; gender: b = –0.05, p < .001), and thus, all
subsequent analyses controlled for these factors. Since 72 par-
ticipants failed to report age or gender, the total number of
participants was reduced to 1,553 individuals.
Self-enhancement was measured by regressing self-ratings
onto trait desirability. This approach allows for individual and
cultural differences independent of the relationship between
self-ratings and desirability of traits. If people self-enhance,
they should rate desirable qualities as especially self-descriptive
relative to the average person (Guenther & Alicke, 2010). In a
two-level model predicting self-report from trait desirability
and controlling for age and gender at the person level, a sig-
nificant self-enhancement effect was found across nations using
dummy-coded variables for each nation at the person level
(b = 0.24, p < .001). Further, a significant self-enhancement
effect was found within every nation (all ps < .022). Consis-
tent with the findings of prior research, our results showed that
there was considerable variability between nations (bs =
0.07–0.42).
Next, national Gini coefficients were included at the nation
level in a three-level model. As income inequality increased,
people’s tendency to self-enhance also increased (b = 0.01, p =
.002). Next, we included individualism/collectivism alongside
the Gini coefficients. In this model, income inequality
remained a significant predictor of self-enhancement (b =
0.01, p = .001), and individualism did not significantly predict
levels of self-enhancement above income inequality (b <
–0.001, p = .331). Moreover, Gini coefficients were signifi-
cantly better predictors of self-enhancement than individualism
and collectivism were, χ2(1) = 25.40, p < .001. A model with
Gini coefficient and individualism/collectivism performed
better than a model with individualism/collectivism only,
χ2(2) = 15.94, p < .001. By contrast, adding individualism/
collectivism to a model containing only Gini coefficients did
not result in a significant improvement, χ2(2) = 0.05, p > .500.
These results indicate that, in this sample, income inequality
was more important for explaining cross-national differences
in levels of self-enhancement than individualism/collectivism
were. For example, in comparing Venezuelans (high collectiv-
ism, high income inequality) with Japanese (high collectivism,
low income inequality) in a two-level model with dummy-
coded nation variables, the former showed much higher levels
of self-enhancement than did the latter (b = 0.40 vs. b = 0.07,
respectively).
We also investigated the influence of another cultural vari-
able, power distance, which may be more closely linked to
economic inequality than individualism and collectivism are.1
Power distance captures the extent to which people prefer
an autocratic hierarchy versus a relative equality of power
(Hofstede, 2001). When power-distance scores were included
in the three-level model, Gini coefficients remained signifi-
cant predictors of self-enhancement (b = 0.01, p = .001), but
individualism/collectivism (b < 0.001, p = 0.513) and power
distance (b < 0.001, p = .986) did not.
There was a significant positive relationship between Gini
coefficients and self-enhancement at the national level, r(15) =
.79, p < .001. As expected, people see themselves as superior
to others to a greater extent in societies with a higher level of
income inequality (Fig. 1). To investigate whether the observed
positive prediction of self-rating by trait desirability reflected
the belief that the self was indeed better than others, we
selected the 20 most desirable traits in each nation. We then
conducted a single-sample t test for each nation to test whether
the mean self-rating score for the 20 most desirable traits dif-
fered from the scale midpoint of 4 (which was labeled as nei-
ther less nor more than the average student/person). In 14 of
the 15 nations, the average self-rating was indeed significantly
higher than the scale midpoint for these desirable traits (all
ps < .01). Only Japanese participants failed to rate these traits
significantly above the scale midpoint, t(19) = 1.36, p = .19,
although the mean was in the anticipated direction (M = 4.12).
In short, people typically viewed themselves as better than
average.
Discussion
The tendency for people to believe they possess more desirable
characteristics than others appears widespread. It was observed
in 15 nations spanning all developed continents. It is important
to note that the magnitude of this self-enhancing bias varied
according to societal differences in economic inequality. In
societies with less income inequality, people showed a rela-
tively weak bias compared with people in societies with more
income inequality. It appears that people in societies with more
income inequality tend to view themselves as superior to others,
and people in societies with less income inequality tend to see
themselves as more similar to their peers.
Socioeconomic differences accounted for the variability in
this bias better than did individualism/collectivism, the cul-
tural dimensions that have guided most previous research.
This finding does not invalidate the utility of individualism/
collectivism for thinking about cultural differences. Indeed,
these dimensions capture many East-West differences in self-
and other perception, including self-enhancement (for recent
reviews, see Heine & Hamamura, 2007; Kitayama & Uskul,
2011; Oyserman & Lee, 2008). Our research emphasizes
the importance of considering material differences between
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Economic Inequality and Biased Self-Perception 1257
societies—particularly the distribution of income—when
examining psychological differences. This emphasis is consis-
tent with recent suggestions that people may respond to social
and material conditions when self-enhancing (von Hippel &
Trivers, 2011).
It is unlikely that economic inequality directly leads to
biased self-perception. It seems more likely that there are
intervening factors that result from socioeconomic differ-
ences. One possibility raised earlier is perceived competition
(Takata, 2003). When benefits and costs are polarized by
inequality, people may compete for social superiority (Kerbo,
2011; Wilkinson & Pickett, 2010). One manifestation of
this drive may be the presentation of the self as superior
through self-enhancement. Thus, it may be the competitive-
ness triggered by economic inequality that drives biased self-
perception. It is interesting to note that competitiveness may
be related to differences in individualism as well, with more
individualistic societies also fostering greater competition
(Chen & West, 2008; Green, Deschamps, & Paez, 2005). Both
individualism and economic inequality may work in concert to
foster a perception of competition that results in cultural dif-
ferences in levels of self-enhancement.1 Likewise, both indi-
vidualism and economic inequality may undermine the norm
of modesty. Modesty norms play an important role in reducing
self-enhancement, and when they are compromised, self-
enhancement increases (Kurman, 2003, 2010). In societies
with more income equality, people may not only have more-
equal incomes, but they may also feel a pressure to seem more
similar to others. This may manifest as a modesty norm,
whereby people are discouraged from voicing both real and
perceived superiority. Understanding the relationship between
socioeconomic structure and individual psychology can help
bridge the gulf between large-scale sociological studies of
societies and individual social and psychological functioning.
An important limitation of our study should be noted.1 With
the exception of the U.S. sample, our participants were drawn
from university populations. Participant selection can seri-
ously affect research findings (Henrich, Heine, & Norenzayan,
2010), and our selection of university students might be con-
founded with levels of social inequality. University students
might often find themselves in situations in which their social
standing is actually better than the average person’s, an effect
which would be more pronounced in societies with more
income inequality. Although we tried to guard against this
confound by having participants compare themselves with the
average student, a more robust test of whether economic
inequality influences self-enhancement would involve sam-
pling participants from groups receiving the median income in
a society and examining their levels of self-enhancement.
In sum, cultural differences in self-perception have been
the subject of extensive psychological research. The prevail-
ing explanation of these differences has focused on the cul-
tural dimensions of individualism and collectivism. In contrast,
in the research reported in this article, we examined whether
socioeconomic factors play a more important but unrecog-
nized role in self-perception. It appears that aspects of macro-
level socioeconomic organization may be reflected in
microlevel self-perception.
Declaration of Conflicting Interests
The authors declared that they had no conflicts of interest with
respect to their authorship or the publication of this article.
Australia
Belgium
China
Estonia
Germany
Hungary
Italy
Japan
Korea
Peru
South Africa
Singapore
Spain
United States
Venezuela
0
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
Self-Enhancement
Economic Inequality (Gini coefficient)
20 25 30 35 40 45 50 55 60
Fig. 1. Scatter plot (with best-fitting regression line) showing self-enhancement (as indexed by beta
weights from a two-level model) as a function of economic inequality (as indexed by the Gini coefficient)
across nations. The data points for Australia and Italy are very close and overlap on the graph.
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1258 Loughnan et al.
Funding
Steve Loughnan is a postdoctoral research associate funded by the
Leverhulme Trust (F/00236/W). Peter Kuppens is a postdoctoral
research fellow with the Fund for Scientific Research-Flanders and is
supported by Katholieke Universiteit Leuven Research Council
Grants GOA/05/04 and OT/11/031. Anu Realo and Jüri Allik were
supported by a grant from the Estonian Ministry of Education and
Science (SF0180029s08). Junqi Shi was supported by a grant from
the National Nature Foundation of China (NSFC:71021001).
Note
1. We thank an anonymous reviewer for this suggestion.
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