I just signed my contract for a summer job as a lifeguard. I’ll be working 40 hours a week and making the big bucks! But, I just talked to my friend and learned that she has a job babysitting full time, making double the amount of money. Why was I so excited about my job and now jealous after finding out about hers?
Imagine you are all packed and ready to go on an awesome one week spring vacation to Florida when your cousin calls to wish you Bon Voyage. This trip has literally been on your mind for weeks and all your friends are jealous since they don’t have any travel plans. But while you are chatting with your cousin, she mentions that she is going to spend a week in the French Riviera. Oh la la! Suddenly, your trip seems kinda lame because who wouldn’t want to spend afternoons munching on macaroons in the Mediterranean? Your getaway was swell compared to your friends’ yet the awesomeness of your cousin’s trip made yours seem less fun. All because vacations are positional goods, or big ticket items that are valued as long as they are better than everyone else’s.
Knowing that you are bringing in the big bucks feels good, but salary is a positional good. So, you were jealous because your friend had a better deal than you even though you were making more than ever before. Slip on your sunglasses, slap on sunscreen, and sit in that lifeguard’s chair with no regrets because the payout of your summer job is just as good as you originally thought it was!
P.S. H/T to the Financial Times and their article titled “When more is less” for inspiring this question.