Income Inequality and Social Status: The Social Rank and Material Rank Hypotheses

The current review evaluates the status hypothesis, which states that that the desire for status is a fundamental motive. Status is defined as the respect, admiration, and voluntary deference individuals are afforded by others. It is distinct from related constructs such as power, financial success, and social belongingness. A review of diverse literatures lent support to the status hypothesis: People's subjective well-being, self-esteem, and mental and physical health appear to depend on the level of status they are accorded by others. People engage in a wide range of goal-directed activities to manage their status, aided by myriad cognitive, behavioral, and affective processes; for example, they vigilantly monitor the status dynamics in their social environment, strive to appear socially valuable, prefer and select social environments that offer them higher status, and react strongly when their status is threatened. The desire for status also does not appear to be a mere derivative of the need to belong, as some theorists have speculated. Finally, the importance of status was observed across individuals who differed in culture, gender, age, and personality, supporting the universality of the status motive. Therefore, taken as a whole, the relevant evidence suggests that the desire for status is indeed fundamental.

The social rank theory of psychopathology suggests that with the evolution of social hierarchies various psychobiological mechanisms became attuned to the success or failure in conflict situations. Specifically, subordinates and those who have lost status are at greater risk of pathology than winners and those of higher status. In this theory concepts of defeat and entrapment are seen to be of special relevance to the study of depression. We outline the role of defeat and entrapment within the social rank theory of depression. New self-report measures of entrapment and defeat were developed and used to test predictions of the social rank theory of depression. Both a sample of students and depressed patients were assessed with these new scales and other social rank measures (e.g. social comparison and submissive behaviour). The entrapment and defeat measures were found to have good psychometric properties and significantly correlated with depression. They were also strongly associated with other rank variables. Defeat maintained a strong association with depression even after controlling for hopelessness (r = 0.62), whereas the relationship between hopelessness and depression was substantially reduced when controlling for defeat. Entrapment and defeat added substantially to the explained variance of depression after controlling for the other social rank variables. Defeat and entrapment appear to be promising variables for the study of depression. These variables may also help to develop linkages between human and animal models of psychopathology.

Using General Social Survey data from 1972 to 2008, we found that Americans were on average happier in the years with less national income inequality than in the years with more national income inequality. We further demonstrated that this inverse relation between income inequality and happiness was explained by perceived fairness and general trust. That is, Americans trusted other people less and perceived other people to be less fair in the years with more national income inequality than in the years with less national income inequality. The negative association between income inequality and happiness held for lower-income respondents, but not for higher-income respondents. Most important, we found that the negative link between income inequality and the happiness of lower-income respondents was explained not by lower household income, but by perceived unfairness and lack of trust.