Inequality in the distribution of economic wealth within populations has been rising steadily over the past century, having reached unprecedented highs in many Western societies. However, this development is not reflected in people’s perceptions of wealth inequality, as the public tends to underestimate it. Research suggests that inequality estimates are derived from personal reference groups, which, as we propose, are expanded by social network site (SNS) use. As content on SNSs frequently revolves around events of consumption, signaling enhanced overall population wealth, this study tests the hypothesis that SNS use distorts inequality perceptions downward, i.e., increases the perception of societal equality. Responses of 534 survey participants in the United States confirm that SNS use negatively predicts perceived inequality. The relationship is stronger the more SNS users perceive the content they encounter online as real, supporting the assumption that observing other people’s behavior online lowers estimates of nationwide wealth inequality. These findings provide novel insights on inequality misperceptions by suggesting individuals’ SNS use as a new predictor of perceived wealth inequality.
Baum, Katharina; Köster, Antonia; Krasnova, Hanna; and Tarafdar, Monideepa, "Living in a World of Plenty? How Social Network Sites Use distorts Perceptions of Wealth Inequality" (2020). In Proceedings of the 28th European Conference on Information Systems (ECIS), An Online AIS Conference, June 15-17, 2020.
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