Reference Groups and Relative Effects on Well‐Being

Laura Kudrna

Review of Income and Wealth, 2024, vol. 70, issue 3, 581-604

Abstract: Economic growth may not improve society if people compare their achievements to others in relative ways that detract from well‐being. But who are these others and what economic dimensions matter? This research applied a p‐value ranking approach from genetics research to tackle the issue of reference group selection. Data from over 30,000 British and American adults were analyzed in nearly 800 multi‐level models. Over 300 measures of reference group socio‐economic status and eight measures of well‐being were used. The results showed that reference groups based on geography and age, perceptions of those in “society,” and rank wealth were most consistently associated with well‐being. Measures less consistently associated with well‐being used averages, medians, and proportions in states and local authorities without demographic sub‐groups. Future researchers should consider the consistently associated dimensions of reference groups when constructing relative measures.

Date: 2024
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https://doi.org/10.1111/roiw.12656

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