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Citation

Boyce CJ, Brown GDA & Moore SC (2010) Money and happiness: Rank of income, not income, affects life satisfaction. Psychological Science, 21 (4), pp. 471-475. https://doi.org/10.1177/0956797610362671

Abstract
Does money buy happiness, or does happiness come indirectly from the higher rank in society that money brings? We tested a rank-income hypothesis, according to which people gain utility from the ranked position of their income within a comparison group. The rank hypothesis contrasts with traditional reference-income hypotheses, which suggest that utility from income depends on comparison to a social reference-group norm. We found that the ranked position of an individual's income predicts general life satisfaction, whereas absolute income and reference income have no effect. Furthermore, individuals weight upward comparisons more heavily than downward comparisons. According to the rank hypothesis, income and utility are not directly linked: Increasing an individual's income will increase his or her utility only if ranked position also increases and will necessarily reduce the utility of others who will lose rank.

Keywords
rank; relative income; life satisfaction; social comparisons; money; happiness; Economics Psychological aspects;Finance Psychological aspects

Journal
Psychological Science: Volume 21, Issue 4

• BoyceBrownMoore_PsychScience.pdf