Please award this degree, even though it is likely to make others miserable – and me too : an investigation of the relationships of absolute and relative socio-economic status with subjective wellbeing in the United States and England

Abstract

This thesis argues that we can better understand the relationship between socio-economic status and subjective wellbeing (SWB) by considering more carefully to whom and how people make comparisons and what is meant by SWB. It questions existing knowledge with new empirical evidence and frameworks for both ‘reference groups’ – the people to whom we (may) make comparisons – and SWB. These contributions are situated within existing social comparison, norm and identity theories from economics and psychology. Using two large datasets from the United States and England, over 300 reference group measures are created. Nearly 4K models are analysed, adjusting for multiple comparisons. Although the results should be interpreted cautiously due to issues of endogeneity, they suggest that upward comparisons to others’ socio-economic attainment do matter for SWB and are almost always negative after accounting for individual attainment and multicollinearity. Comparisons to others of a similar age and to perceptions of those in ‘society’ matter most consistently. Socio-economic attainment in and of itself, however, is not sufficient to improve how people feel even if it improves their thoughts about how well their lives are going, and it is difficult to escape the negative effects of relative socio-economic status. Negative effects are evident across the distributions of SWB and absolute socio-economic status, for both women and men, and across age groups. It is not possible to dismiss the idea that comparisons to others’ socio-economic attainment do not matter – and yet, achieving socio-economically in absolute terms does not guarantee a life free of misery and full of happy and meaningful moments, either, even if this should be the ultimate aim of people and social policies. These results can inform normative debates about optimal resource distributions in societies and underscore the importance of considering how well people are doing socio-economically in relative and not only absolute terms.