People Wouldn't Rather Have Higher Relative Income in a Poorer Society

The essay challenges the claim that people care so much about status that they would choose lower absolute income in a poorer society. It cites a well-known hypothetical survey in which participants chose between earning $50,000 while others earned $25,000 and earning $100,000 while others earned $200,000, with prices held constant. Many chose the lower income, a result offered as evidence that relative standing matters more than material prosperity. The author argues that answers to cost-free hypothetical questions can reflect social expectations or other motives, and should be tested against what people actually do.

In the author’s view, migration and work choices point the other way: people from poorer countries often move to wealthier ones even when this means losing professional status or taking difficult, low-status jobs. African doctors may become cab drivers in the United States if their credentials are not accepted, and migrants from the Middle East and Africa tend to be relatively prosperous in their home countries rather than among the poorest. Employers in Gulf states also continue to attract South Asian laborers despite reports of harsh treatment. A possible reply is that migrants measure status against their communities of origin, where earning money abroad can confer prestige; the essay raises this explanation in connection with Mexican workers in the United States and Americans spending money in Thailand.