<i>As the economists David Hemenway and Sara Solnick demonstrated in a study at Harvard, many people would prefer to receive an annual salary of $50,000 when others are making $25,000 than to earn $100,000 a year when others are making $200,000.</i><p>I find it more surprising that everyone didn't choose the first option. Even though $100,000 is more than $50,000, in terms of purchasing power it's all about relativity. The more other people earn given the same productivity, the higher prices will be overall and the less purchasing power you'll have.<p>For example, if you gave everyone $10m and I only got $2m.. I'd still be a "millionaire" but inflation would go through the roof and I'd still end up with rather little compared to everyone else.
Obsession with status isn't the only explanation for this. A problem that affects only you probably <i>is</i> one that you should worry more about. Whereas something that affects everyone is probably not something you can easily fix.
Social status is a zero-sum game, so if happiness correlates strongly with it.... Then an egalitarian policy could be the best choice <i>even if everyone would individually be worse off</i>.<p>I think this is a crucially missing point from most analyses about the income gap.
I'm not sure I see the real insight here, but the data point is nice.<p>AFAIK, Social standing, group health/status are all innately part of humans, but our economic status is quite synthetic.<p>If it was all the food we had for 3 months instead of income, I think we'd see something different.