Conditions for the dissatisfying effect of reference group income

Research has found a weak effect of the income of a supposed reference group on one's life satisfaction and assumed that social comparison theory explains the effect. This assumption is in need of further empirical examination. Specifically, the examination needs to identify the reference group with which one makes income comparisons. Based on this reference group, an elaboration of social comparison theory suggests two conditions for the impact of social comparison. Condition 1 suggests that reference group income is more dissatisfying when the reference group is larger. Condition 2 expects that income disparity is less dissatisfying when more of the reference group has comparable incomes. The test of the conditions in this study employs survey data obtained from 2,079 Hong Kong Chinese adults. Results manifested the two conditions based on personal income. In contrast, the main effect of reference group income on life satisfaction was too weak to be significant. Hence, the dissatisfying effect of reference group income is conditional on reference group size and the non-comparability of reference group income within the group. © 2012 by Nova Science Publishers, Inc. All rights reserved.