The DOI matches its Crossref record; 6 of the 6 references it cites were found in a registry or an index.
Neighbors as Negatives: Relative Earnings and Well-Being
Abstract
This paper investigates whether individuals feel worse off when others around them earn more. In other words, do people care about relative position, and does “lagging behind the Joneses” diminish well-being? To answer this question, I match individual-level data containing various indicators of well-being to information about local average earnings. I find that, controlling for an individual's own income, higher earnings of neighbors are associated with lower levels of self-reported happiness. The data's panel nature and rich set of measures of well-being and behavior indicate that this association is not driven by selection or by changes in the way people define happiness. There is suggestive evidence that the negative effect of increases in neighbors' earnings on own well-being is most likely caused by interpersonal preferences, that is, people having utility functions that depend on relative consumption in addition to absolute consumption.
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“although there are some differences depending on what measure of SWB is used (Kahneman and Deaton, 2010), and whether other people's income is included in the assessment (Luttmer, 2005;Layard et al., 2010).”
From Measuring Subjective Wellbeing: Recommendations on Measures for use by National Governments (2012) · cites this paper as Luttmer, 2005
Citations
Cites
The CES-D Scale: A Self-Report Depression Scale for Research in the General Population
Radloff, L. S. (1977) · Applied Psychological Measurement · doi:10.1177/014662167700100306 · Cited by 53,267
By Force of Habit: A Consumption‐Based Explanation of Aggregate Stock Market Behavior
Campbell, J. Y., & Cochrane, J. H. (1999) · Journal of Political Economy · doi:10.1086/250059 · Cited by 5,210
Semiparametric Difference-in-Differences Estimators
Abadie, A. (2005) · The Review of Economic Studies · doi:10.1111/0034-6527.00321 · Cited by 2,286
Do People Mean What They Say? Implications for Subjective Survey Data
Bertrand, M., & Mullainathan, S. (2001) · American Economic Review · doi:10.1257/aer.91.2.67 · Cited by 1,391
Veenhoven, R. (1991) · Social Indicators Research · doi:10.1007/bf00292648 · Cited by 1,358
The relationship between income and subjective well-being: Relative or absolute?
Diener, E., Sandvik, E., Seidlitz, L., & Diener, M. (1993) · Social Indicators Research · doi:10.1007/bf01079018 · Cited by 1,175
Cited by
Developments in the Measurement of Subjective Well-Being
Kahneman, D., & Krueger, A. B. (2006) · Journal of Economic Perspectives · doi:10.1257/089533006776526030 · Cited by 3,177
Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles
Clark, A. E., Frijters, P., & Shields, M. A. (2008) · Journal of Economic Literature · doi:10.1257/jel.46.1.95 · Cited by 3,159
Dolan, P., Peasgood, T., & White, M. (2008) · Journal of Economic Psychology · doi:10.1016/j.joep.2007.09.001 · Cited by 3,121
Advances in subjective well-being research
Diener, E., Oishi, S., & Tay, L. (2018) · Nature Human Behaviour · doi:10.1038/s41562-018-0307-6 · Cited by 2,003
Is the desire for status a fundamental human motive? A review of the empirical literature.
Anderson, C., Hildreth, J. A. D., & Howland, L. (2015) · Psychological Bulletin · doi:10.1037/a0038781 · Cited by 1,133
Metadata
- Authors
- Luttmer, E. F. P.
- Affiliations
- Harvard University (US)
- Corresponding author
- Luttmer, E. F. P.
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 2005-08-01
- Volume
- 120
- Issue
- 3
- Pages
- 963-1002
- ISSN
- 0033-5533 (ISSN-L)
- 1531-4650
- OpenAlex
- W3125532899
- Cited by
- 1,583
- References
- 6
- Citations by year
- 2026: 11 · 2025: 24 · 2024: 27 · 2023: 47 · 2022: 39 · 2021: 60 · 2020: 75 · 2019: 79 · 2018: 76 · 2017: 86 · 2016: 99 · 2015: 127 · 2014: 111 · 2013: 131 · 2012: 116
- FWCI
- 81.62
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The Quarterly Journal of Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Psychology › Social Psychology › Psychological Well-being and Life Satisfaction
- Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
- Social Sciences › Health › Health disparities and outcomes
- Keywords
- relative earnings, subjective well-being, happiness, neighborhood income, relative income, interpersonal preferences, self-reported happiness
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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