Upper-middle-class risk-taking is a defensive response to falling behind the top 2%
Evidence
For those in the upper middle class, while their incomes did increase, they were still falling behind those in the top 2%. The evidence shows that they adopted a more aggressive attitude towards risk and engaged in more financial activities to support their lifestyles. — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 145
Categorization
- QUESTION: Is this a causal claim or a correlation? Could be worth chasing whether income divergence directly drives risk appetite.
- XREF: connects to: Financial risk-taking emerges in middle classes as a response to top-end inequality. — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 3; The finance culture took root in the upper-middle class. — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 65; Acceptance of debt and risk differs sharply by socioeconomic class — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 120 (+5 more)
Related
- Financial risk-taking emerges in middle classes as a response to top-end inequality. (similarity 0.92)
- Financialized risk-taking is concentrated in the upper middle class, not spread across all earners (similarity 0.91)
- Acceptance of debt and risk differs sharply by socioeconomic class (similarity 0.88)
- The finance culture took root in the upper-middle class. (similarity 0.87)
- Financialization of households is stratified by class, not uniform (similarity 0.83)
- Top-end wealth concentration intensifies pressure on lower households to maintain relative lifestyles. (similarity 0.83)
- People are risk-averse in gains but risk-seeking in losses (similarity 0.81)
- Upper-middle households increasingly treated homes as leverage assets. (similarity 0.80)
- Most US households stayed averse to financial risk even during the 1990s boom (similarity 0.79)
- Households signal financialization through risk-taking, relaxed debt attitudes, and speculative strategies (similarity 0.79)
Broader Connections
- Top-end wealth concentration intensifies pressure on lower households to maintain relative lifestyles.
#expands(0.90) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 40 - Prospect theory shows risk attitudes shift with gain or loss framing
#exemplifies(0.85) — Donald MacKenzie, An Engine, Not a Camera, 1199 - People are risk-averse in gains but risk-seeking in losses
#complicates(0.80) — John T. Jost and Jim Sidanius, Political Psychology, 2406 - Households signal financialization through risk-taking, relaxed debt attitudes, and speculative strategies
#expands(0.78) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 48