Natural disasters and other traumatic events often draw a greater charitable response than do ongoing misfortunes, even those that may cause even more widespread misery, such as famine or malaria. Why is the response disproportionate to need? The notion of reference dependence critical to Prospect Theory (Kahneman & Tversky, 1979) maintains that self-utility, or benefit to self, is not absolute level of wealth but rather gain or loss relative to a reference point. Four studies show that sympathy (Study 1), dictator offers (Study 2), and judgments of deservingness (Study 3a) are reference-dependent: people respond greater to victims of loss than to victims of chronic conditions. This tendency goes away when people evaluate victims in comparison (Study 3b) and when evaluating affect-poor "statistical victims", as compared to affect-rich "identifiable victims" (Study 4). Together, these results shed light on seemingly irrational patterns of humanitarian aid.
