Why Wealth Changes How We Think About Fair Prices

By Kirsten Hilgeford

When it comes to the price of financial services such as loans, mortgages, and insurance, the perception of what is “fair” has a lot to do with how wealthy you are. In the study “Seeing Like a Company or a Customer: Selective Empathy in Pricing,” appearing in the February 2026 issue of the American Sociological Review, authors Barbara Kiviat (Columbia University) and Carly R. Knight (New York University) examine how Americans evaluate the fairness of risk-based pricing—where consumers who are predicted to be high-risk/costly are charged more. 

Grounding their approach in previous sociological research on empathy, Kiviat and Knight demonstrate that either side of an economic transaction—company or customer—can become the object of empathy. To establish this, Kiviat and Knight conducted three studies on risk-based pricing, focusing on transactions between customers and companies. In the first study, they analyzed two nationally representative surveys to examine the relationship between household income and beliefs about the fairness of charging high-risk people more for insurance and credit. The authors uncovered a pattern in which wealthier individuals, regardless of their economic self-interest or ideology, were more likely to accept the moral legitimacy of tying prices to a person’s behavior.  

The authors then proposed the new lens of “selective empathy” to apply to their remaining two studies. Selective empathy is when an individual disproportionately directs their empathy to and takes the perspective of either the company or the customer in evaluating pricing arrangements. Kiviat and Knight found that wealthier individuals are more likely than lower-income individuals to empathize with companies—and less likely to empathize with high-risk consumers. 

“Our findings show that support for pro-business pricing practices is not simply about self-interest,” said the authors. “Instead, wealthier Americans more easily see things from a company’s ‘point of view,’ making these practices appear fair even when they consistently burden high-risk consumers. This class-based split in perspective matters to how people judge the fairness of our economy.” 

The authors note that their findings ultimately “reveal that risk-based pricing—even in its most institutionalized, ostensibly innocuous form—reflects a class-based understanding of market fairness.”