Comparison is the Thief of Joy: An Empirical Study on the Impact of Comparative Income and Other Determinants on Life Satisfaction in South Africa

Abstract

This paper explores how relative income, a person’s income compared to those around them, affects life satisfaction in South Africa. Using data from the Gauteng City-Region Observatory’s Quality of Life Survey (2011–2021), the study analyzes the relationship between income, reference group income, and a variety of explanatory variables on subjective and financial well-being, using an ordered probit model. The results show that both absolute and relative income significantly impact general and financial satisfaction. Notably, being richer than one’s peers has a stronger positive effect on well-being than the negative effect of being poorer, which contrasts with traditional theories of income comparison. The study also highlights how race, access to basic services, and social relationships shape satisfaction levels, particularly for historically disadvantaged groups. These findings provide important insights for policymakers aiming to improve well-being, especially in countries burdened by inequality. More importantly, the research offers insights into the social dynamics of competition and comparison, revealing what motivates individuals. In doing so, this paper serves as a broader commentary on society and the relevance of the study in today’s context.