This paper presents an empirical analysis of the importance of dcomparison incomeT for
individual well-being or happiness. In other words, the influence of the income of a reference
group on individual well-being is examined. The main novelty is that various hypotheses are
tested: the importance of the own income, the relevance of the income of the reference group and
of the distance between the own income and the income of the reference group, and most
importantly the asymmetry of comparisons, i.e. the comparison income effect differing between
rich and poor individuals. The analysis uses a self-reported measure of satisfaction with life as a
measure of individual well-being. The data come from a large German panel known as GSOEP.
The study concludes that the income of the reference group is about as important as the own
income for individual happiness, that individuals are happier the larger their income is in
comparison with the income of the reference group, and that for West Germany this comparison
effect is asymmetric. This final result supports Dusenberry’s idea that comparisons are mostly
upwards.