Democratized capital? An economic-psychological examination of social identity, financial behavior and economic inequality

Bachmann, Robin (2024) Democratized capital? An economic-psychological examination of social identity, financial behavior and economic inequality. PhD thesis, London School of Economics and Political Science.

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Abstract

Capital income plays a pivotal role in personal financial well-being and societal economic equality. Low capital income participation is a pressing challenge in Germany, Europe, and globally, manifesting not only along economic strata but also diverse social divisions. Traditional economic research puzzles over low capital market participation, while behavioral economics, focusing on psychological factors, often overlooks its complex social context. Based on social psychological research, this thesis develops in four papers a social identity approach to capital income participation, exploring the economic-psychological intersection between social identity, financial behavior, and economic inequality. Utilizing socio-economic panel data, it reveals how identification with various socioeconomic and sociocultural groups, beyond mere membership in these groups, predicts household capital income in the UK (Paper 1). It demonstrates how the perception of socioeconomic status predicts private investment decisions in both real-life contexts and controlled investment tasks, and it tests through experiments how altering perceptions related to financial resources and rank can shift investment decisions (Paper 2). Moreover, investigating the prerequisites for political interventions on capital income participation, it employs advanced computational text analysis to show the effectiveness of social identity language and leadership in the German parliament (Paper 3), and specifically during financial parliamentary debates among diverse status groups (Paper 4). This research aims to understand how social identity and social identity leadership, intersecting with social status and socioeconomic inequality, impacts capital income participation at the individual and societal levels. The findings offer valuable insights into the less obvious factors shaping private financial decision-making and well-being as well as public financial debates and outcomes in the political realm and beyond. By extending social identity research into the under-researched area of financial behaviors, it contributes to the emergent fields of identity economics and the psychology of inequality.

Item Type:	Thesis (PhD)
Additional Information:	© 2024 Robin Bachmann
Library of Congress subject classification:	B Philosophy. Psychology. Religion > BF Psychology H Social Sciences > H Social Sciences (General) H Social Sciences > HC Economic History and Conditions
Sets:	Departments > Psychological and Behavioural Science
Supervisor:	Gleibs, Ilka and Delaney, Liam
URI:	http://etheses.lse.ac.uk/id/eprint/4759

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