Learning about one’s relative position and subjective well-being

In this paper we show evidence which suggests that changes in an individual’s relative position affects his subjective well-being. In this sense, our findings are in line with those who argue that a felicity function should take into account both, absolute and relative position. Our result are based on a simple experimental design to discuss whether learning about one’s relative position affects subjective well-being. Additionally, using nonexperimental data we find a significant association between subjective well-being and relative wage.