On the other hand, the effect on well-being of moving up or down the income rank is greater for those living in places where the gap between the rich and the poor is wider.
“Earning more than others may improve an individual’s sense of well-being more in places where inequality is rife, but it also means that they are likely to suffer more psychologically if they move down the income rankings, Powdthavee said.
He added that there is evidence that policies lowering income inequality by redistributing wealth improve the aggregate well-being of the population in a country.
“This could be because there is less anxiety about social status in more equal societies, which means those who fall down the income rank would suffer a less severe drop in well-being,” he said.