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Occupy Lake Wobegon

Income inequality may lead to self-enhancement bias.

The Occupy movement protests against economic inequality and the concentration of wealth among an elite few. In Garrison Keillor’s fictional town of Lake Wobegon, “all the women are strong, all the men are good-looking, and all the children are above average.” Surprisingly, the former may have something to do with the latter.

The Lake Wobegon effect is a natural tendency to overestimate one’s capabilities and see oneself as better than others. Research psychologists refer to this tendency as self-enhancement bias and have found evidence for its existence in many domains. Most of us think we’re funnier, smarter, warmer, more honest, or more conscientious than we really are.

Cross-cultural studies have found a link between the tendency to self-enhance and the degree of individualism in a society. In a review of 91 cross-national comparisons, Steven Heine and Takeshi Hamamura found that individualistic Westerners, as a group, consistently viewed themselves in a more positive light than did collectivistic East Asians. Indeed, the Westerners in these studies were much more likely than East Asians to see themselves as uniquely talented and possessing desirable personality traits.

An international team of researchers, however, recently discovered that individualism may not be the driving force behind cultural variations in the tendency to self-enhance. Instead, they found that income inequality was a better predictor of the Lake Wobegon effect.

Steve Loughnan, a psychologist at the University of Kent in England, collaborated with colleagues in 12 other countries to test a novel hypothesis: The magnitude of self-enhancement bias, which varies across cultures, will be greater in societies that have high levels of income inequality.

To test their hypothesis, Loughnan and his team gathered data from more than 1,600 participants—most of them university students—in 15 nations on five continents. The participants rated a large set of personality traits (e.g., agreeableness) and values (e.g., achievement) on two dimensions: (1) How much do you possess this characteristic compared to the average person? and (2) How desirable is this characteristic?

As reported in the October 2011 issue of Psychological Science, people living in countries with high income inequality—Peru, South Africa, and the United States, for example—were more likely to see themselves as better than other people. People living in countries with relatively low income inequality—Belgium, Japan, and Germany, for example—were less likely to self-enhance. When the researchers statistically controlled for the effects of income inequality, they found no relationship at all between individualism and self-enhancement.

So, in countries where there’s a large disparity between the haves and the have-nots, people are more likely to fall prey to the Lake Wobegon effect, to overestimate their abilities and achievements and believe they are better than most people.

The reasons for this surprising relationship are not yet clear. Professor Loughnan suspects it may have something to do with the competitiveness that can be triggered by economic inequality. If wealth is distributed very unevenly and you want one of the (relatively few) jobs that pays a high salary, it makes sense to eschew modesty and present yourself as superior to others. The meek may inherit the earth, but they won’t have fat wallets when it happens.


Heine, S. J., & Hamamura, T. (2007). In search of East Asian self-enhancement. Personality and Social Psychology Review, 11(1), 4-27.

Loughnan, S., and 18 others. (2011). Economic inequality is linked to biased self-perception. Psychological Science, 22(10), 1254-1258.

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