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1

Dan Ariely needs lab rats. 

Our new friend, the renowned behavioral economics researcher, is conducting an experiment to better understand people's perceptions around wealth inequality. A timely subject, as the wealth gap between rich and poor in many developed countries is now reaching all-time highs.

Following Chris' recent interview with him, Dan has put together a survey for the CM.com audience to fill out on this topic. Perhaps we'll become one of the colorful studies Dan is famous for citing in his talks!

If you're game for it, take 10 minutes to fill out Dan's survey. And remember, this is for posterity, so please be honest. (Can anyone cite that film reference?)

Here's a bit more background in Dan's own words:

Few economic issues incite such heated academic debate as the equality and inequality of wealth, but the reality is that we just don't know how people view and judge wealth equality and inequality. This is why we are asking for your help.

Take a second to think about it. At what point would you consider the wealth gap to be too great? Would you pay more in taxes to live in a more equal society? Or would you prefer if everyone was responsible for his or her own financial well-being? In an ideal world, how would wealth be distributed?

This survey will show you different possibilities for how wealth could be distributed within a country.  For each example, we’ll ask you whether or not you’d like to live in a country with a similar distribution of wealth.  It should take you approximately 10 minutes.  Please click on the link below to complete the survey, and we’ll share the results soon. Thanks for participating!

Thanks to Dan and his team for valuing our opinion enough to extend this opportunity to us. We'll publish the results here once they're available.

If you haven't done so already, listen to our interview with Dan on his work and how its findings help us better understand the human factor in economic decision-making.

Don't forget to take the survey! And if you're comfortable, recruit your friends & colleagues - Dan is hoping for two thousand entries. Let's see how close we can get.

cheers,
Adam

This is a companion discussion topic for the original entry at https://peakprosperity.com/your-chance-to-advance-science-2/

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“So please, be honest…”
Count Rugen – “Princess Bride”  

ZING!

I used that movie as a litmus test for potential girlfriends for years.  If it ain’t funny, we’re not in love.  Or something like that…

 

3

Sager:
You are correct, sir - nice job!

But don’t get any ideas, man… we’re both married…

4

[quote=Adam]Sager:
You are correct, sir - nice job!
But don’t get any ideas, man… we’re both married…
[/quote]
“Mawwige!!”

5

[quote=SagerXX]“So please, be honest…”
Count Rugen – “Princess Bride”  
ZING!
I used that movie as a litmus test for potential girlfriends for years.  If it ain’t funny, we’re not in love.  Or something like that…
[/quote]
“Incon-th-eivable!”
Litmus test indeed.  My wife didn’t move to the US until 1999 and hadn’t seen most American movies made before then, but even SHE knew and liked that movie before I met her  (now if only I could get the same reaction from her with “Time Bandits”, “UHF”, or “Monty Python and the Holy Grail” )

  • Nickbert
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I question your use of the old, tired ‘left-right’ political paradigm.  This is a large part of the problem in economics these days, the real spectrum is one of the amount of freedom in the society, not  what flavor of oppression, personal or economic you support.
It distubs me to see you use such phrases as “how wealth could be distributed”, as if people had no right to ditribute their own wealth as they see fit.  The issue is how wealth is created in the first place, and if you don’t get to decide what happens to your life and property, who does?  And how did they get a superior claim on you than you yourself?

You express a desire to “better understand the human factor in economic decision-making”.  This is an admirable goal.  Maybe you can help explain why it’s more complicated than allowing each human to make their own decisions about their own economic life and endeavouring to eliminate artificial monopolies enforced by coercive mechanisms like governments and government protected corporations.

The evidence is overwhelming that liberty is the necessary element that enables people to find the optimum balance in any society and that tinkering by ‘central planners’ only prevents this self-correcting mechanism from working by insulating those in power from the consequences of their actions, making the innocent suffer instead.

I came to this site on recommendation of Damon Vrabel whose video series Renaissance 2.0 concludes with the realization that we need philosophy to help us entangle the mess we find ourselves in.  It is only in free thinking and being willing to explore wherever the truth leads that will allow us to begin to build an alternative to the Dark Age mentality currently being held in too many minds.
To this end, I invite you to look at the discussion flourishing at www.freedomainradio.com, now the largest philosophy site on the web.  Together, I think we can create long-term change that will ultimately cease creating the myriad problems we see in our world today.

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Just with a quick glance, I see at least one potentially fatal flaw in this study.  Most higher net worth individuals won’t put their net worth down in a study like this where the confidentiality of the data may be in doubt. I think there will a skewing of responses as a consequence. 

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As a scientist and researcher, found survey flawed.
Akin to all wanting peace.

Leave it at that.

 

Nichoman

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Pretty easy survey.  Not meaning to contradict anyone else here. I just like simple surveys as it makes the researcher ask the right questions instead of data mining. I have read that these numeric scales are surprisingly accurate in behavioral and medical research even when people just guess and put the first number (0-100) that they think of-pain scales, for example, are designed on the same principle for use in hospital. Apparently they are pretty accurate representations of a patient’s level of pain.
 

I found the introduction bothersome to read but that is because I am familiar with these issues from following CM.com.   I hope we get feedback on the results.

Take care

Denise

ed for grammar and spelling

10

I’ve always been fond of the Rawlsian analysis ever since I once took a course called “The Economics of Fairness and Altruism” back in the 80s.  Behavioral Economics has come a long way since then, but still has little traction with policy makers.  That should change in the next 20 years, but who knows.
Besides what would one “want” to see in terms of wealth distribution, I’ve also wondered if there is any natural proportion to such things.  Pareto thought there was based on historical research over several centuries (and mistakenly thought fascism would restore some kind of natural economic order).  Most people now know him for the “80-20” rule, but this is just a recognition that wealth distribution conforms to what are known mathematically as “power laws”, which Benoit Mandelbrot showed were applicable to markets and all sorts of natural phenomena.

Many of the hockey-stick graphs in the crash course are essentially variations of power law functions.  (Look at the energy input/output one in particular.  And these ideas form the basis not only for this analysis, but also for the recent popular works of N. Taleb (Finance and Philosophy) and A. DeVany (Power Law concepts applied to Nutrition and Exercise), as well as many other things.

It would be more interesting to me to see the distributions represented as power law functions as opposed to pie charts and/or to see whether various distributions can be fitted to such functions.  I think they would ultimately be more useful to policy makers as well.  But perhaps the work has been done – I have not really looked for it. 

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I find the whole liberal vs conservative question to be too simplistic.  The dimensions of authoritarian vs libertarian needs to be considered as well. 
You may find that the mainstream conservative views agree more with your principals.  You might also find that the mainstream liberal views agree more.  However, both views seem to want the government to have more authority over our lives.  Both views are at odds with personal liberty in this new century. 

In this survey, you are left with the label of “moderate” if you disagree with either agenda.   That too does not account for your views on government authority over aspects of your life or of distribution of your wealth (precisely the point of this survey).   

An example of a survey that demostrates both dimensions can be found at http://www.nolanchart.com/survey.php

Warren

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Just an FYI, Adam. I’m not able to complete the survey. Once clicked, the slider controls that allow me to set my preference never release. If I click a slider to adjust my preference and then move my mouse to the bottom right of the page to click the next page button, the slider also moves to the extreme right position.
Browser and platform info below:
Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.9.2.11) Gecko/20101012 Firefox/3.6.11 ( .NET CLR 3.5.30729; .NET4.0E)

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Here’s the hockey stick illustration of income distribution and an article that confirms the old adage, if you want to feel rich, hang around with people that make less than you do.
http://economix.blogs.nytimes.com/2011/01/11/why-so-many-rich-people-dont-feel-very-rich/

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Thanks for flagging tripp. I’ve let Dan’s survey team know.FYI: you should be able to click directly to the right of each scale and type in a number from 0 to 100 (which will then move the slider to the appropriate spot)

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The manner in which this poll was laid out seems inadequate, and raised some serious questions for me as to what the goals might be that the information will be used to support.
Why must wealth be redistributed? Why not have social mobility and wealth concentration, provided the laws are applied equally and everyone gets the same chance under the law?

I view these types of questions from my own perspective, and who could not?

I sacrifice time with my family by working. I justify the time away by being able to provide things for them, like food, shelter, and clothing.

I work even harder by building my own business, in addition to my full time job. I do this so that my children may enjoy a higher chance of social mobility. I am earning them more experience through travel, better educational opportunities, more wisdom through training and broader life experience.

I can only provide those things by paying others to work, in addition to my own labor. I can only provide those things by working four maybe five times more, harder and smarter than most people I know. I dont personally know anyone else who works 20 hours days at least three days a week.

I can only provide a living to the people who work for me when I am allowed to see the fruits of my effort. I will not be compelled to strive, to sacrifice time with my children, my family, for another persons benefit. That is slavery.

I will not work this hard and sacrifice for a goal that is taken from me by an authority to give it away to those I cannot see, and in a manner I do not approve of.

If I quit, then six families lose their homes, their living. I will not be able to help my neighbors or family financially when they need it.

How does taking more of my earnings benefit anyone long term? How is this not slavery to the masses, as opposed to slavery to the monarch?

If the law states I may only keep $XXXX money, regardless of how much I can earn, why would I sacrifice my family or my health to pursue more? If I am not able to earn more, keep more, create jobs, then who will provide for those I no longer employ?

If  equality is the goal, then why isnt everyone allowed to succeed, instead of only preventing abject failure?

Why is it more important to confiscate and redistribute than to ensure equal protection under the law?

Personally, I have come to the point where if I earn any more income, I will be taxed to below where I started from. Is there a reason for me to feel that justice is being served, or to feel good about this?

Just wanted to give some food for thought from my perspective.

Jager06

16

I’m currently listening to Dr. Ariely’s book Predictably Irrational, and I can only imagine what a fool I made of myself with that survey. Surprised

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+1 Adam Selene and Jager,
I didn’t really see this as very balanced because it prompts assumptions that the participant supports a particular distribution of wealth, rather than a position on economic management, which IMHO would be a more useful gauge of peoples’ actual stance on the economy. 

Questions like: 
“What percent of taxed incomes should go to support welfare programs?”, or;
“Would you support an initiative which increased taxes to fund _________.” 

Would make more sense - because a zero in this regard isn’t showing a scalar bias, but shows both an inclination of how the person feels about socio-economic issues (Which validates the political questions) and their general attitude towards wealth and how it should be shared, if at all. It might also provide some essential data about the perceived success/failure of existing programs.

Might re-tool the test and present it again.
As is, I’m not confident that it really presents much data.

Also, a legend on the page where you actually appropriate the scales would be helpful.
The concept is easy enough to understand but I found myself trying to remember exactly which color corresponded to which economic demographic. But I’m not all that bright >.<

Just some thoughts.

Cheers,

Aaron

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Even with economic mobility not being limited. I found myself very much disliking the first scenarios (where the top quintiles get taxed so much, all 5 quintiles had the same wealth distribution) and also very much disliking the last scenarios (where the top 20% end up with 80% to 90% of all wealth).
I approached my answer from the point of view of Rawls’ “veil of ignorance” thought experiment, where people had to devise a society where they could be placed randomly into any of the roles or positions.

Because, while everyone may think they’re the exception - they’re likely not. Just like those law school students who take on massive debt because they think they’re going to be the exception that gets the $160k job offer when in reality most won’t), 20% will remain at the bottom and if their lot is both prolonged and miserable, it makes for a poorer society in general. I also felt that a healthy middle class is good for society as whole.

At the same time, taxing away the wealth of those who generate wealth and accumulate - that takes away the incentives of people. Why bother if all the money gets taken away? Why struggle and work hard if taxes will give you what someone else worked hard to earn? So I disliked those redistributions, too.

Ariely may find that many people have assigned numbers similar to how I assigned them (bell curve distribution). However, I feel the survey seemed to be very limited in its scope. Then again, I’m not sure how any survey could truly help anyone arrive at a a model that would take society’s complexity into account or take into account the fact that communism, socialism, and even capitalism as economic systems all have potential dystopian endgames when taken to their human conclusions. (Hint: We’re facing capitalism’s end game right now.)

Edit: I agree with Aaron Moyer (below). I forgot which color corresponded with which quintile. A legend on that actual sliding scales page would have been helpful.

Poet

19

Amen Jager06!

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A++ Jager06!