Direct evidence for income comparisons and subjective well-being across reference groups

- We use novel data on intensity of income comparisons and perceived relative income.
- Comparison information is available for many proposed reference groups.
- These comparison variables are related to life satisfaction (subjective well-being; SWB).
- Comparison intensity and SWB are negatively related for job-related reference groups.
- Income comparisons are mostly upwards for job-related reference groups.

This note provides evidence for the relationship between income comparisons and subjective well-being (SWB), using novel German data on self-reported comparison intensity and perceived relative income for seven reference groups. We find negative correlations between comparison intensity and SWB for colleagues, people in the same occupation and friends, but not for other reference groups, such as neighbours. Work-related income comparisons are mostly upwards and there is a strong negative correlation between perceiving to earn less than the reference group and SWB.