<p>I've found <a href="http://www.nber.org/papers/w10667.pdf?new_window=1">Neighbors as Negatives: Relative Earnings and Well-Being</a> by E.F.P. Luttmer (2005), although I'm not sure it's the right one. I've heard about your study as well, but I thought it was older than 2005. You can read the study I linked and look up the references. There are quite a lot that touch the same subject.</p>

CC BY-SA 3.0
2012-07-18T14:48:00.147Z
2012-07-18T14:48:00.147Z
Mien
<p>I remember reading about a study. I forgot the actual details of it, but the gist of it was: people were asked in what situation they would prefer to live, one where they make \$100,000 dollars and the neighbours all make \$200,000 dollars, or one where they make \$10,000 dollars and the neighbours all make \$5000 dollars. Most participants chose the \$10,000 vs \$5,000 situation, even though they would have ended up with much less money (note: I am pretty sure I got the actual numbers wrong). </p>

<p>Sadly, I don't remember where I read it (thought it must have been in Predictably Irrational, but can't find it there). </p>

<h3>Questions</h3>

<ul>
<li>What is the reference for the study</li>
<li>What theories explain this behavior? </li>
<li>Where can I read background information on the topic?</li>
</ul>

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2012-07-18T10:41:48.220Z
I found a mention in an old Jonah Lehrer post too, suggesting that the difference is much smaller, 27K/30K vs 30K/35K. But he hasn't quoted a source. http://scienceblogs.com/cortex/2006/07/07/money-cant-buy-you-love-1/
rumtscho
<reference-request><decision-making><economics>
A study about preference for making relatively vs. absolute more money?
rumtscho
# A study about preference for making relatively vs. absolute more money?

(Asked by: username_0 on 2012-07-18)

I remember reading about a study. I forgot the actual details of it, but the gist of it was: people were asked in what situation they would prefer to live, one where they make \$100,000 dollars and the neighbours all make \$200,000 dollars, or one where they make \$10,000 dollars and the neighbours all make \$5000 dollars. Most participants chose the \$10,000 vs \$5,000 situation, even though they would have ended up with much less money (note: I am pretty sure I got the actual numbers wrong).

Sadly, I don't remember where I read it (thought it must have been in Predictably Irrational, but can't find it there).

### Questions

* What is the reference for the study
* What theories explain this behavior?
* Where can I read background information on the topic?

**Tags:** reference-request, decision-making, economics

> **Comments:**
> **username_0**: I found a mention in an old Jonah Lehrer post too, suggesting that the difference is much smaller, 27K/30K vs 30K/35K. But he hasn't quoted a source. http://scienceblogs.com/cortex/2006/07/07/money-cant-buy-you-love-1/  

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## 1 answers

### Answer by username_1 on 2012-07-18. Score: 6

I've found [Neighbors as Negatives: Relative Earnings and Well-Being](http://www.nber.org/papers/w10667.pdf?new_window=1) by E.F.P. Luttmer (2005), although I'm not sure it's the right one. I've heard about your study as well, but I thought it was older than 2005. You can read the study I linked and look up the references. There are quite a lot that touch the same subject.


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