Measuring The Fair Distribution of Social Goods

When human communities subsisted as hunter-gatherers, we recognized the evolutionary benefit of fairness.  As our social nature evolved to living in settled communities, some people started having more than others. We accepted a certain level of inequality–as long as everyone had enough. But that begs the question: what is the fair distribution of social goods? In other words, what levels of inequality are people willing to live with?

Perceived, Desired, and Actual Levels of Inequality

Behavioral economist Dan Ariely pondered this question with a simple survey methodology. He asked people how they thought wealth was distributed among the quintiles of the U.S. population (the bottom 20 percent, next 20 percent, and so on up to the top 20 percent). He also asked how people thought wealth ideally should be distributed. Finally, he compared respondents’ perceptions and ideals to the actual wealth distribution.

Here’s the part that struck me:

  • People thought that the bottom 20 percent of society controls 2.9 percent of the wealth.
  • People thought that, in a more just society, the bottom 20 percent of society should control 10.5 percent of the wealth.
  • In reality, the bottom 20 percent of society controls just 0.1 percent of the wealth.

In other words:

  • We think the bottom 20 percent is 29 times richer than they actually are (2.9 percent versus 0.1 percent).
  • We think the bottom 20 percent should be 105 times richer than they actually are (10.5 percent versus 0.1 percent).

Those are staggering differences between our ideals, our perceptions, and our reality.

Things Worse Than Wealth Inequality

Ariely used this methodology to explore the fair distribution of social goods: health, education, infant mortality.

He found that people were less tolerant of inequality in social goods than in wealth. What people weren’t considering is that access to social goods is often tied to wealth. Richer families and communities can afford better schools and health care.

Ariely also found that people were less tolerant of inequality that impacted people with less control or say in the matter. For example, health among infants should be more equally distributed than among adults, because infants have no control over the health care that they receive. Again, people weren’t considering the impact of wealth on distribution of social goods. Richer communities can better fund measures to lower infant mortality and increase prenatal and early childhood care and development.

It doesn’t seem just.

Just What is a Just Society?

How did Ariely define a just society for this experiment?

He used the just society definition of philosopher John Rawls. Rawls’ consider a society just if, once you knew everything about that society, you’d be willing to enter that society at any existing level of inequality. For instance, if you knew exactly how wealth was distributed, you’d willingly be either the richest or poorest person in a just society.

Notice that people didn’t opt for completely equal distribution of wealth. In their just society, people thought that bottom 20 percent should get 10 percent of the wealth, or half what they would expect with completely equal distribution.

Ariely’s respondents would agree to live in the bottom 20 percent of U.S. society, if the bottom controlled 10.5 percent of the wealth and presumably received a fair distribution of social goods.

Innovating Towards a Fair Distribution of Social Goods

So, as marketers, where do we go from here? We know that distribution is one of the pillars of marketing. People want a fairer distribution of social goods, especially for those who have less control in their lives, like the young. On the other hand, people don’t want a perfectly equal distribution of social goods.

As marketers of social goods, we most likely need to innovate ways to expand the bottom 20 percent’s access to social goods, without necessarily reducing distribution to the other quintiles. Possible approaches include

  • Geographic: changing or increasing the location of distribution points to be more accessible to the bottom 20 percent. For instance, making more community services available at or through public schools.
  • Electronic: changing the design or packaging of social goods for electronic distribution, especially to mobile devices. For instance, offering video appointments for services, instead of requiring in-person appointments.
  • Financial: changing the pricing or payment options for social goods, to make them easier for the bottom 20 percent to acquire. For instance, pay-as-you-go pricing for utility services can be easier for people with tighter cash flows or low credit scores.

None of these ideas are particular difficult or revolutionary. Other sectors of the economy offer these approaches. Take health care–neighborhood clinics, tele-medicine, and sliding-scale payments are familiar parts of health care delivery.

Government and social service marketers can innovate in distribution, design, and pricing, to increase the reach and effectiveness of their existing products and services for the bottom 20 percent.

What changes in access to social goods would make your community more just?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.