Income inequality is associated with stronger social comparison effects: The effect of relative income on life satisfaction.

Abstract

Previous research has shown that having rich neighbors is associated with reduced levels of subjective well-being, an effect that is likely due to social comparison. The current study examined the role of income inequality as a moderator of this relative income effect. Multilevel analyses were conducted on a sample of over 1.7 million people from 2,425 counties in the United States. Results showed that higher income inequality was associated with stronger relative income effects. In other words, people were more strongly influenced by the income of their neighbors when income inequality was high.

Income inequality, perceived competitiveness, and approach‐avoidance motivation

“…Consistent with Hypothesis 1, Studies 1–3 showed that local income inequality positively predicted self‐reported perceptions of competitiveness. In our view, this perception that others are competitive is the reason that income inequality pervasively “gets in our head,” fostering social comparison (Cheung & Lucas, ), a sense of relative deprivation (Kondo et al, ), or even status competition–related anxiety (Delhey & Dragolov, ).…”

“…More recently, Cheung and Lucas () reported that the negative effect of neighbors’ (i.e., people within the same county's) income on life satisfaction was stronger in more economically unequal U.S. counties. This finding was also interpreted as indicating that income comparison groups are more polarized in more unequal places (e.g., the 99% vs. the 1% of the “Occupy Wall Street” slogan), making normative standards of income comparison more salient.…”

The psychological consequences of income inequality

“…Cheung and Lucas () demonstrated the status competition pathway. Using a survey of 1.7 million Americans, they found that, even controlling for people's own income, having richer neighbors decreased people's life satisfaction.…”

Social Comparison in Coping With Occupational Uncertainty: Self‐Improvement, Self‐Enhancement, and the Regional Context

“…Surprisingly little is known, but much has been speculated, about the role of the broader context in social comparison. For instance, researchers have widely assumed that comparing one's prosperity level with that of others partly explains why rising national income does not always lead to increases in average SWB (Diener, Tay, & Oishi, ) or why well‐off individuals report lower life satisfaction when they live in richer neighborhoods (Cheung & Lucas, ). Furthermore, the adverse effects of unemployment on mental health are sometimes reduced in regions with high unemployment rates (Clark, ; Clark, Knabe, & Rätzel, ).…”