Despite decades of research, we still lack a clear explanation for the emergence and persistence of inequality. Here we propose and evaluate a marginal utility of inequality hypothesis that nominates circumscription and environmental heterogeneity as independent, necessary conditions for the emergence of intragroup material inequality. After coupling the Standard Cross-Cultural Sample with newly generated data from remote sensing, we test predictions derived from this hypothesis using a multivariate generalized additive model that accounts for spatial and historical dependence as well as (...) subsistence mode. Our analyses show that the probability a society will be stratified increases significantly as a function of proxies of environmental heterogeneity and environmental circumscription. This supports the hypothesis that increasing environmental heterogeneity and circumscription drives the emergence and persistence of inequality among documented societies across the globe. We demonstrate how environmental heterogeneity and circumscription produce situations that limit individuals’ options so that some may find it in their best interest to give up some autonomy for material gain, while others may find it in their best interest to give up some material resources for another individual’s time or deference. These results support the marginal utility of inequality framework and enable future explorations of the ecological conditions that facilitate the emergence of intragroup inequality through time and across the globe. (shrink)