A socioecological approach to explaining how economic inequality and psychological tendencies mutually constitute each other.

Economic inequality is one of the defining challenges of our era. Social science research links higher levels of economic inequality to a range of undesirable outcomes, including more crime, social anomie, and ill health. Social psychological research is at the forefront of investigating how economic inequality shapes the human mind and behavior, but it has mostly focused on explaining how economic inequality at the societal level causes individual level manifestations. In this review, we reconceptualize economic inequality as a dynamic system, and we adopt a socioecological perspective to explain how economic inequality and psychological tendencies mutually constitute each other. First, we show how the psychological experience of economic inequality is afforded by social and physical environments that people interact with. Next, we show that through mechanisms such as norm formation, individuals and institutions can maintain or change economic inequality. Our socioecological perspective highlights the self-reinforcing cycle of economic inequality and individual behavior, and it discusses to what extent lived experiences and psychological manifestations of economic inequality may differ across economic strata. We end by discussing the implications of our model for the research agenda in the social psychology of economic inequality.