Which socio-economic comparison groups do individuals choose and why?

Abstract

Socio-economic comparison among individuals is the process by which individuals assess their own socio-economic position in relation to others. In this study we identify which are the most salient groups in socio-economic comparisons among individuals, clarify the role of individual-level characteristics in the selection of specific comparison groups, and test if contextual factors explain variation in individuals’ choices regarding their socio-economic comparison groups. We utilise a unique data-set that allows the choice of socio-economic comparison groups in 34 countries in Central, Southern and Eastern Europe and Central Asia to be investigated. The results indicate that individuals make socio-comparisons not only with close groups, such as friends and neighbours, but also within their own families, cross-nationally, and over time. Multilevel and multivariable analyses suggest that individuals’ demographic and socio-economic characteristics and the extent of their social trust are significantly linked with the selection of specific comparison groups. We also find that the distance from the city of Frankfurt in Germany of countries where individuals live is an important factor in why people compare their own socio-economic position with those who live in Western Europe.