What do you think the rich or poor would do
A so-called natural field experiment, where the subjects were not aware they were tested, was conducted in an unspecified city in the Netherlands among the wealthiest and the poorest. Jan Stoop, an economist at the Erasmus School of Economics in the Netherlands working with two other researchers, dressed up as a mailman and “misdelivered” cards with various amounts — 20 euros (almost $19), 5 euros ($4.70), and so on — over a five-year period.
The result? He found that those living in the big homes were more likely to return the money than the poor. In a study entitled, “Are the Rich More Selfish than the Poor, or Do They Just Have More Money?,” researchers used funda.nl, a real-estate website, to look at house prices, and used a list of social housing corporations that contained addresses of the least expensive rental apartments for the low-income households.
It turns out there is a formula for determining how likely someone is to return money: “alpha - n - c,” where alpha is the altruism of the person, “n” is the neediness of the recipient and “c” is the stress cost of returning it. The latter two variables vary by rich or poor, but Stoop said the altruism remained the same. “People are all the same,” Stoop said, and if the poor were richer, “they would behave the same as the rich.” And if the rich were poorer? Their honest behavior, the study suggests, would also change.
See also: Why the poor spend more on restaurants than all but the very rich
How credit scores predict what you will buy next For decades, FICO has used big data and mathematical algorithms to calculate people's three-digit credit scores. Now it's using the same technology to predict whether a consumer's likely to buy a product in-store or click on a link online.
Don’t miss: 10 things rich people know that you don’t
The experiment’s findings were surprising to some, Stoop said. People expected the low-income households to have more empathy toward the intended recipient and would, therefore, be more likely to return the card. But their need to make ends meet prevented them from doing so. The incentives to return the money are different, obviously, between the rich and the poor — especially when 20 euros can mean a great deal of difference to pay for food or a utility bill.
But in fairness to the low-income people in the study, being wealthy doesn’t necessarily mean you have more compassion. One series of studies by University of California, Berkeley psychologists, which involved comparing feelings of different social classes in various tests, found that the lower the income of a person, the more compassionate they were. As people became more wealthy, they were less attuned to others’ feelings and less likely to pay attention with those whom they’re interacting.
Hollywood is quick to show the dark side of finance, such as in the 2013 blockbuster “The Wolf of Wall Street” starring Leonardo DiCaprio. When people think of some of the wealthiest individuals haven’t been the most honest, such as Bernie Madoff, who ran an almost $65 billion Ponzi scheme, and energy company Enron, which exaggerated its financials in 2001 through auditing loopholes, hid billions of dollars in debt and eventually filed for bankruptcy.
read more Read more Click Here
The result? He found that those living in the big homes were more likely to return the money than the poor. In a study entitled, “Are the Rich More Selfish than the Poor, or Do They Just Have More Money?,” researchers used funda.nl, a real-estate website, to look at house prices, and used a list of social housing corporations that contained addresses of the least expensive rental apartments for the low-income households.
It turns out there is a formula for determining how likely someone is to return money: “alpha - n - c,” where alpha is the altruism of the person, “n” is the neediness of the recipient and “c” is the stress cost of returning it. The latter two variables vary by rich or poor, but Stoop said the altruism remained the same. “People are all the same,” Stoop said, and if the poor were richer, “they would behave the same as the rich.” And if the rich were poorer? Their honest behavior, the study suggests, would also change.
See also: Why the poor spend more on restaurants than all but the very rich
How credit scores predict what you will buy next For decades, FICO has used big data and mathematical algorithms to calculate people's three-digit credit scores. Now it's using the same technology to predict whether a consumer's likely to buy a product in-store or click on a link online.
Don’t miss: 10 things rich people know that you don’t
The experiment’s findings were surprising to some, Stoop said. People expected the low-income households to have more empathy toward the intended recipient and would, therefore, be more likely to return the card. But their need to make ends meet prevented them from doing so. The incentives to return the money are different, obviously, between the rich and the poor — especially when 20 euros can mean a great deal of difference to pay for food or a utility bill.
But in fairness to the low-income people in the study, being wealthy doesn’t necessarily mean you have more compassion. One series of studies by University of California, Berkeley psychologists, which involved comparing feelings of different social classes in various tests, found that the lower the income of a person, the more compassionate they were. As people became more wealthy, they were less attuned to others’ feelings and less likely to pay attention with those whom they’re interacting.
Hollywood is quick to show the dark side of finance, such as in the 2013 blockbuster “The Wolf of Wall Street” starring Leonardo DiCaprio. When people think of some of the wealthiest individuals haven’t been the most honest, such as Bernie Madoff, who ran an almost $65 billion Ponzi scheme, and energy company Enron, which exaggerated its financials in 2001 through auditing loopholes, hid billions of dollars in debt and eventually filed for bankruptcy.
read more Read more Click Here
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