Why are we so quick to scrutinise how low-income families spend their money?

As shops re-opened in the UK this week, social media users were quick to pour scorn on the hundreds of eager shoppers who queued up to get in.

Yes, it's unclear whether it was a good decision to re-open businesses — but there was a certain snobbishness to many of these posts. Most of the ire was directed at those lining up outside Primark, which sells clothes at prices more affordable to those on low incomes than most other high street stores.

Meanwhile, queues also formed outside high-end shops like Selfridges and Harrods — but these shoppers somehow escaped the wrath of most social media commentators.

This situation seems to reflect a broader inequality in how we judge other people's purchase decisions: we're much more willing to scrutinise — or even dictate — how people on lower incomes spend their money compared to those on higher incomes. There are countless examples of this — think of the low-income mother who is criticised for treating her children to a rare meal out, or the refugee who is shamed for owning a smartphone.

Now a new study in PNAS provides some clues as to the origins of this bias. Across a series of 11 studies involving more than 4,000 participants, Serena Hagerty and Kate Barasz from Harvard Business School find that we tend to believe lower-income people need less than those on higher incomes, and that this in turn restricts our perceptions about what is acceptable for this group to buy.

In the first couple of studies, participants read about Joe, who was described as having either a low- or high-paying job. They learned that Joe had won a $200 gift card which he spent on a flat screen TV. They then rated five statements which measured how "permissible" they thought his purchase was (e.g. "He made a responsible purchasing decision" and "He deserves to buy what he did"). Those who read that Joe had a low income rated his purchase as less permissible than those who read that he had a high income, or who were given no information about his income.

In a subsequent study, participants read about a woman looking for a child's car seat who ultimately chooses to buy the more expensive of two options. Again, those who read she had a low income thought her decision was less permissible than those who read she had a high income.

In fact, the team observed the same pattern for a range of products: participants who rated the permissibility of 20 different goods and services, from household appliances to pet products, indicated that almost all of these were less acceptable for a lower-income person to buy.

So people clearly think that purchasing the very same product is often less acceptable for a low-income than high-income individual — but why is that the case? The researchers thought it could come down to people's perceptions of the needs of others. So, in the next few studies, they looked at which purchases participants deemed necessary.

The team repeated the car seat scenario, for instance, finding that those who read that the mother was on a low income believed that the purchase was less necessary than those who read she was on a high income.

Similarly, in another study, participants read about a low- or high-income family looking for a new house, and were asked to rate how necessary it was that the house had 20 different features, such as a garage or storage space.

Of these 20 features, 17 were rated as more necessary for the high-income family. Disturbingly, these even included basic requirements like "close to hospitals" or "a neighbourhood that is safe/secure".

These findings suggest that people believe low-income individuals need particular items less than high-income individuals — and further studies showed that purchases that were considered less necessary were, in turn, considered less permissible.

Finally, the researchers demonstrated that these perceptions actually influence people's behaviour. In one study, participants could help a hypothetical family decide what to buy.

Participants who read that the family was on a low income were much less likely to allocate money to "low permissibility" products like a television than those in the high-income condition. And when deciding whether to gift a low-income individual either a $100 grocery voucher or a $200 electronics voucher, only a quarter of participants went for the latter, even though it was worth twice as much.

More than half said they would give a high-income individual the electronics voucher, however. "Paradoxically, the result was that participants effectively allocated more money to higher-income people than lower-income people," the authors note.

These last findings have worrying implications when it comes to thinking about charitable donations or how resources are distributed to the less fortunate, write the authors.

If people hold such a narrow view of the needs of those on lower incomes, then it's easy to see how resources could be allocated disproportionately to the most basic necessities — food and housing, say — while ignoring higher-level needs that are seen as less "permissible" — access to the internet or to recreation facilities, for instance.

The research could also help explain why it is so common to hear politicians and opinion writers moralising about what poorer people should and should not spend their money on, or why state provisions for those on lower incomes often barely meet the most basic standard.

"In essence," the researchers conclude, "people seem to conceptualize necessity differently for lower-income versus higher-income others, such that the "wants" of the poor evolve into the "needs" of the wealthier."

Further reading

– Inequality in socially permissible consumption

About the author

Matthew Warren (@MattBWarren) is Editor of BPS Research Digest