ABSTRACT
We test whether various measures of relative income and rank income hypothesis explain life satisfaction in Ecuador. We found robust evidence that the rank position of the income within the reference group explains life satisfaction. In contrast, the effect of relative income measures on happiness is sensitive to the variables used to construct the reference group.
Disclosure statement
No potential conflict of interest was reported by the authors.
Data availability statement
Notes
1 For Western European countries.
2 For Eastern European countries.
3 The higher the Yitzhaki index, the higher the gap between the actual income with the reference group income.