Would you rather earn $80,000 and live in a neighbourhood of those earning $100,000, or would you rather earn $100,000 and live in a neighbourhood of those earning $80,000. Money and happiness is entirely subjective according to your environment.
Making 80% of the median income is completely within normal ranges; it seems to me it would be barely noticeable in both cases. On the other hand, the difference between US$100,000 and US$800,000 is gigantic, it's a complete change in lifestyle and security.
Seriously, does anyone here actually find either question to pose a true dilemma?
Now reverse it. You earn $100,000. Everyone else earns $80,000. How do you feel?
Those base feelings explains consumerism and envy.
Now, I might be uncomfortable making $100K when my neighbors made $400K. That's an identifiable difference, and it would really mark me as the poor person in the neighborhood. But a 20% difference from the mean? I wouldn't even notice it.
i've done both. i've lived in areas where i made significantly more than my neighbors (regular apartment complex in the middle of LA/hollywood), and now i live in a place where i make significantly less (i live in a modest condo next to giant $5-10M houses in santa monica and ultra-mansions a short distance further - think 'lower pac heights' in SF-speak)
it's obviously better living next to rich neighbors. everything in the neighborhood is much nicer, and i get to enjoy a lot of their wealth indirectly. for example, i live next to some of the best hospitals in the country. the public parks are ridiculously nice and all the streets are basically perfectly conditioned. seeing nice things/home/cars and rich people is also an aspirational trigger for me. also, for a very slightly higher prices on the things i actually buy, i get to enjoy better food and shopping.
in the other, poorer neighborhood where i made more money, everything was shitty (for US standards). the roads were in disrepair, there was crime, the food wasn't nearly as good, there was constant police activity, the roads would be blocked for public events, etc. seeing broke or down-and-out people everywhere bumemd it out. it was just an overall hassle.
if you took the median income from both areas, it probably wouldn't deviate by more than 50 grand. there are rich people in both areas. but one is significantly better than the other.
i really wouldn't understand the opposite point of view, that living next to poorer people is somehow better. perhaps if you lived in an imginary WORLD where you made significantly more than the rest of the people, but in the real world it's all about locales.
Challenging yourself to earn more, and actually seeing the numbers rise, is where the joy comes from, at least in my experience. If you are challenging yourself and your income isn't rising (or falling, even) it is pretty disheartening. If you aren't challenging yourself, I expect life becomes pretty boring. Either way, I can see why happiness is linked to income deltas, even once the basic means are covered and presumably people with higher incomes have seen more changes.
Yes. If you make significantly more than the people around you, it's more difficult to make friends with the people in your community. If they know, people will ask you for money, treat you differently, and some will be jealous. It's sad..but true.
"If you are challenging yourself and your income isn't rising (or falling, even) it is pretty disheartening"
Welcome to pretty much every 9-5 job.
Then for better or worse, you are unusual. Most people notice disturbances when they are significantly different from their peers in this regard.
However, I wonder if location is having less of an impact now that we connect with our peers over technology instead of physical location (IE, neighbors).