Higher or Lower Income?
January 26th, 2008 by WTJWhy Living in a Rich Society Makes Us Feel Poor:
Put the question another way, however, and we seem a little less certain. Consider a choice between these two worlds:
World A: You earn $110,000 per year, others earn $200,000.
World B: You earn $100,000 per year, others earn $85,000.
Robert H. Frank is a professor at Cornell University and the author of “Luxury Fever.”
The income figures represent real purchasing power. Your income in World A would command a house 10 percent larger than the one you could afford in World B, 10 percent more restaurant dinners and so on. By choosing World B, you’d give up a small amount of absolute income in return for a large increase in relative income.
Which would you choose?
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