How tall are you? How tall would you like to be? And how tall do you tell other people you are?

Most of us – and especially men – tend to exaggerate our height, adding a centimetre or two when we think we can get away with it. This is understandable: ours is a culture that valorises the tall and belittles, as it were, the short. As a result, being tall brings with it a host of advantages.

The taller you are, for instance, the more likely you are to go on to higher education. This is true even after controlling for cognitive ability, suggesting that some kind of subtle – indeed unconscious – bias may be operating among educators. Being tall is also associated with career success: in fact it has been estimated that a person who is six feet tall is likely to earn around £100,000 more over the course of a 30-year career than someone who is five foot four. And as if this weren't sufficient, being tall is likely to help in your romantic life too: altezza mezza bellezza, as the Italians say – height is half of beauty. Thus taller adolescents of both sexes typically date more than their shorter peers, and tall men are more likely to find a long-term partner, or indeed several. (It's not all roses for the tall, however: they are more likely to be bitten by midges.)

Given that tall people appear to have the world at their feet, insect bites notwithstanding, it's hardly surprising that they also enjoy certain psychological benefits. For males in particular, height seems to be linked to greater happiness and self-esteem (though some studies suggest that the effect is modest), and a markedly reduced rate of suicide.

Doubtless these psychological advantages stem in part from the pervasive tendency to associate height with power. That tendency is embedded in our language: we "look up" to people we consider superior; those without influence are the "little people". Height is taken as an index of leadership ability: among US presidential candidates, for example, the tallest usually wins the popular vote (though not necessarily the presidency). Taller presidents stand a better chance of being re-elected. And presidents tend to be much taller than average for men of their age. Moreover, we don't merely assume the tall are powerful; when we feel more powerful ourselves we tend to overestimate our height.

If height and self-esteem are so enmeshed, what are the psychological consequences of feeling smaller than usual? That was the question we set out to explore in a recent experiment. Our hunch was that the experience would cause people to view themselves more negatively, reducing their sense of status and self-esteem, and triggering a sense of vulnerability. And, because these psychological traits play a major part in paranoia, we wanted to see whether lowering a person's height would change the way they viewed other people's intentions towards them. (Clearly there are times when it's sensible to be wary, but the term paranoia denotes unjustified fear.)

How can someone experience the same situation from differing heights? We opted for immersive virtual reality. In collaboration with computer scientists we recruited 60 women from the general population. These women, like 50% of all individuals, had recently experienced a mistrustful thought, but had no history of severe mental illness. (Being tall has advantages for both men and women, but there are minor differences, and so we decided to test a single-sex group.) We asked the volunteers to take a simulated tube train journey wearing virtual reality headsets. While they walked around in the VR world, the sounds of a typical platform and tube journey – the rumble of the train, the hum of other passengers' conversations – were played to the participants through headphones. And as normal in the tube, there were plenty of other people around: in this case computer-generated avatars.

Virtual reality had two great attractions for us. First, even though you're wearing a VR headset and headphones, your mind and body will respond as if the scenario were real. Second, by programming the avatars to behave in a strictly neutral fashion, we knew that any sense the participants had of their fellow passengers being hostile was unjustified and hence evidence of paranoid thinking .

The participants took the virtual tube journey twice: once at normal height and once with their perspective altered to mimic how the scene would look if they were about a head's height shorter (the order of journeys was randomised). The results were dramatic: when they felt smaller, the participants reported increased feelings of inferiority, weakness, and incompetence. And this explained why they were also more likely to experience paranoid thoughts: for example, that someone in the carriage was being hostile or trying to upset them by staring.

We didn't tell the participants that we'd lowered their height, and very few noticed. "It felt different in the two times. I felt more vulnerable the first time [lowered condition], and also the man with the legs in the aisle was acting in a hostile way towards me the first time, but I didn't feel it so much the second time, even though his legs were in the same place, I don't know why!" was a typical comment. Another participant remarked: "I felt more intimidated the first time [lowered condition], not sure why. There was a girl who kept putting her hand to her face, the man with the blue T-shirt was shaking his head at me, they were staring more at me."

What does this experiment tell us about how to combat paranoia? (It's worth noting, incidentally, that paranoia is much more common than traditionally assumed: around one in five people experience these kind of thoughts on a regular basis, though only a much smaller number suffer from serious persecutory delusions.) Well, it confirms that paranoia is rooted in a sense of inferiority. In situations that make us feel especially small and unconfident our sense of vulnerability can increase, making it more likely that we'll overestimate the danger facing us from other people.

From this it follows that by helping someone to feel more positively about themselves we may be able to reduce their susceptibility to paranoid thoughts (this is an intervention we're currently testing). Virtual reality could be an asset here: if simulating a decrease in height lowers self-esteem, then the opposite may be true too. By allowing people with problematic paranoia to feel taller in VR social situations, we may be able to boost their confidence in the real world. Because although we can't do much about our actual height, we can certainly learn to feel taller. And when it comes to boosting self-esteem, that may make all the difference.

Daniel Freeman (6' 2") and Jason Freeman (6', perhaps) are the authors of Paranoia: The 21st Century Fear, published by Oxford University Press.

Daniel Freeman is a professor of clinical psychology, and a Medical Research Council (MRC) senior clinical fellow, in the department of psychiatry at the University of Oxford, and a fellow of University College, Oxford. Jason Freeman is a psychology writer. On Twitter they are @ProfDFreeman and @JasonFreeman100.