Being richer than your peers can make you happier
In countries where there is a large divide between the rich and the poor, being more affluent than one’s peers can help buy happiness in ways that the actual salary cannot, according to new research.
Researchers from Warwick Business School in the UK found that people who earned more than others in their “reference group” – that is, those of the same age, gender, religion or nationality – were more likely to feel happy with their lives.
Warwick professor of behavioural sciences Nick Powdthavee said that people actually care “very little” about the actual figure they earn, but they are concerned with how their income compares to those around them.
“For example, their sense of wellbeing is more likely to be influenced by whether they are fifth or 40th highest-paid person in their workplace, rather than their precise salary,” he explained.
“Now we have evidence that being the richest person in your peer group is likely to buy you more happiness if you come from a country where income inequality is seen as the norm.”
The researchers compared income, income rank and wellbeing of 160,000 people in 24 countries and used data from Gallup World Poll between 2009-2015, including household income and survey responses gauging happiness, stress, anger and sadness.
Responses whose income ranked higher than others of the same age, gender or religion were more likely to report feeling happy, excited and having smiled the previous day, and were also less likely to report feeling stressed, sad or angry.
In addition, the impact on one’s wellness was greater for those living in places where the gap between the rich and the poor is wider.
Professor Powdthavee said: “Earning more than others may improve an individual’s sense of wellbeing more in places where inequality is rife, but it also means that they are likely to suffer more psychologically if they move down the income rankings.”
“There is evidence that policies which lower income inequality by redistributing wealth improve the aggregate wellbeing of the population in a country,” he explained.
“This could be because there is less anxiety about social status in more equal societies, which means those who fall down the income rank would suffer a less severe drop in wellbeing.”
Professor Powdthavee conducted the research with Dr Anke Plagnol and Lucia Macchia from City University in London. The paper, Buying Happiness in an Unequal World: Rank of Income More Strongly Predict Well-being in More Unequal Countries, is due to be published in the Personality and Social Psychology Bulletin.
Jerome Doraisamy is a senior writer for Lawyers Weekly and Wellness Daily at Momentum Media.
Before joining the team in early 2018, Jerome is admitted as a solicitor in New South Wales and, prior to joining the team in early 2018, he worked in both commercial and governmental legal roles and has worked as a public speaker and consultant to law firms, universities and high schools across the country and internationally. He is also the author of The Wellness Doctrines self-help book series and is an adjunct lecturer at The University of Western Australia.
Jerome graduated from the University of Technology, Sydney with a Bachelor of Laws and Bachelor of Arts in Communication (Social Inquiry).
You can email Jerome at: [email protected]
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