RESEARCH_FILE
Erzo F.P. Luttmer
Dartmouth College (formerly Harvard Kennedy School)
Known for:Empirically establishing that neighbors' relative earnings predict individual wellbeing as strongly as own income, coining the 'Neighbors as Negatives' framework
SEE THE PRACTICE
Turn a thought this research explains into one clear move.
THE THOUGHT
“Everyone my age owns a home already”
YOUR RECORDED RESPONSE
“'Everyone my age' is a highlight reel of maybe six people. I don't set my life by six people.”
ONE PRIVATE MOVE
List the actual names of people your age you know for certain own homes. Stop at the real count, don't estimate. Write one financial metric of yours that improved in the last 36 months.
Key findings
- 2005
Using US General Social Survey data, Luttmer found that higher neighborhood income — controlling for own income — significantly reduced individual happiness, with an effect size roughly equal to an equivalent drop in one's own earnings. The study placed relative income on the same causal scale as absolute income for predicting subjective wellbeing. Neighbors as Negatives: Relative Earnings and Well-Being ↗