Experts at Oxford University reckon folk who lack inches are more likely to feel paranoid, inferior and lack trust in others.
They claim 'short-person syndrome' exists, and that tall people really do have the edge over them.
"Being tall is associated with greater career and relationship success," said Daniel Freeman, who led the study.
"Height is taken to convey authority and we feel taller when we feel more powerful."
The University's team - who published their study in Psychiatry Research - conducted an experiment on 60 women, making them smaller using virtual reality.
The women went on an underground train ride twice, once at their normal height and once at a height that had been virtually reduced by 25cm.
Participants didn't consciously notice their height difference, but noted more negative feelings when they were shorter.
These included feeling incompetent, unlikeable and inferior; leading to an increase in paranoia towards other passengers, researchers said.
Volunteers were more likely to think someone in the carriage was staring at them, had bad intentions towards them or was trying to upset them.
“Height is taken to convey authority and we feel taller when we feel more powerful”Prof Daniel Freeman
The team say their findings could now help to develop more effective psychological treatments for severe paranoia, a serious mental health problem.
Prof. Freeman said: "This all happened in a virtual reality [VR] simulation but we know that people behave in VR as they do in real life."
He added: "It provides a key insight into paranoia, showing that people's excessive mistrust of others directly builds upon their own negative feelings about themselves.
"The important treatment implication... is that if we help people to feel more self-confident then they will be less mistrustful."