This only works if you can change your reference class at will just by moving. If you move, but you still care about what your old neighbours think, the move doesn't help. Worse, in an age of internet and celebrity gossip magazines, your reference class includes all the celebrities who moved into better neighborhoods than you can afford
That feels relevant, and not just old neighbors but coworkers (did you change jobs to a lower pay area but still retain high pay?) and family members as well.
A simple explanation is that people can't enjoy feeling superior if they know they intentionally sought out some inferiors to surround themselves with.
Suppose you are conscious about your weight/height, so you go out of your way to surround yourself with obese people/dwarves. I predict that anyone without an impressive capacity for self-delusion would probably feel more self-conscious about their weight/height, as a result of their strategy.
I would actually flip this argument on its head. Rather than arguing this is "proof" that people don't care about relative income, I would say that this is a market inefficiency waiting to be arbitraged. Cultural norms run strongly against taking up Caplan's proposal, so the vast majority of people don't. Nevertheless, very many would be happy if they did so, I think. Perhaps another piece of life advice to add to the next book.
If we were to flip the script and say people don’t necessarily want to be “have mores” they just don’t want to appear be “has less” then we’re in a better epistemic position.
Moving to a poor area would make you seem like a “has less” and that’s intolerable and why people don’t do it.
It’s essentially the same formula but with an inverted frame.
People are more oriented to avoiding sneers than seeking praise.
Caplan obviously doesn’t spend much time with the masses on Instagram or LinkedIn and doesn’t track what social media is doing to children (which now includes people in their 30’s and 40’s).
I’d argue that people ONLY care about relative income. Countless books (like those by Pinker, et al) dwell on this reality where people think economic expansion is destroying society rather than profoundly improving our prognosis (politics aside).
Maybe the status associated with being a professor has worn off recently in his social circles while absolute income has become more popular.
Moving to a poorer area has consequences on many aspects of the surroundings that someone may desire.
Is anyone claiming ALL people care about is relative income? What I gather is it’s easy to poke at the envy impulse, that’s it. It’s easy for people to resent the success of others and explain it away as undeserved, ill gotten, stolen. The most ill gotten gains in society circa 2025 are likely from companies greasing the government. Inherited money may piss people off but passing down money is a motivator for many people to work hard.
- [ ] I found it beyond farcical a multimillionaire Liz Warren sold billionaire tear mugs. Everything about this was satire playing out in real life. She flipped housing, evil, but she’s out for the consumer who should be protected from arbitrarily defined too high prices except if she’s the seller. She invented an identity (to be fair she really seemed to believe it) that may have bumped up her income and most people don’t start reasoning maybe the problem is the people most benefiting from identity don’t need the benefit at all or at least anywhere near as much as those defined by class and distorted social environments. And if these identities are so bad in terms of current effect why are middle class and upper middle class and even wealthy people exploiting it. Can’t pick on millionaires because if you include housing wealth too many people make the cut. And what lifts up society- Making a profit off an objectively overpriced kitschy mug. It’s difficult to follow the logic of your article because it’s not like you can move to a poorer area and everything will just be the same for you. I agree most people don’t waste mental space comparing income in a broad sense though they may among friends or coworkers but envy is an unfortunately highly sensitive easily pushed button. Didn’t make the cut for a deadly sin for nothing. I’m writing this without my glasses so hopefully it’s in English
> Almost no one relocates to feel relatively rich. (In fact, isn’t this essay the first time you’ve heard anyone point out that this is even an option?!
My guess is that for at least some of the expats, it could be a motivation. Living in Russia in the 90s, it certainly felt that way.
"Almost no one relocates to feel relatively rich. (In fact, isn’t this essay the first time you’ve heard anyone point out that this is even an option?!)"
Nope, Americans move to places where their wealth makes them locally powerful all the time. Thailand. Costa Rica. Digital nomads. Sex tourism. Playing the token American for a local corporation. You're usually sharper than this, Dr. Caplan.
Feel like I see a lot of articles about people moving out of higher cost areas to lower cost areas? "Why I Left New York/San Francisco" is a whole genre unto itself.
The process of gentrification you describe is basically what actually happens.
And developers try to build affordable housing near mansions all the time, they're just stopped by zoning laws (as I expect you're well aware since you wrote a YIMBY book). The weird thing would be if people tried to build mansions next to affordable housing (instead of vice versa). But people living in mansions are already relatively rich even in their rich neighborhoods, so that doesn't support your thesis.
Yes, though I think Bryan is unfairly excluding a lot of counterexamples if "lower cost of living" is defined out. It might be theoretically possible to move to a lower cost of living area without making the person relatively richer, but I would struggle to think of an example. And talking about moving for "lower cost of living" is politer than saying "I want to feel superior to my neighbors," so I'm not surprised people focus on the former.
This is really circular. Poorer places have cheaper cost of living. Part of the reason CA/NY have such high housing prices is that they have such high incomes.
It seems to me that everyone makes a tradeoff between earning potential and cost of living, which are usually in tension because a lot of the goods we care about are positional rival goods and a lot of earning potential is network effects.
You see people relocate to poorer areas when they are able to retain their income independent of place and live around people like themselves. So retirees, full time work from home, etc.
Real estate near high income potential gets bid up, and supply doesn't increase to keep the cost down. In part because "keeping out the riff raff" is part of the value of real estate, and high earning areas require higher prices to keep out the riff raff.
Discrimination might help in this case (keep out the riff raff based on something other then price), but we got the fair housing act and all that.
Is it the case that one can move to a low income area and retain their current income? Caplan talks wealth, but high income for most people is what drives that, working stiffs that they are. I don’t think I could move to a poorer part of Alabama and get the same salary, for example.
There's another reason why people would not adopt this strategy even if they care about relative income: being surrounded by people with low *absolute* income is associated with bad effects i.e. your neighbours and your neighborhood are going to be more likely to suffer from various dysfunctions.
The ideal situation is: (i) your absolute income is high, (ii) your neighbours' absolute income is high, (iii) your income is relatively higher than theirs, e.g. you're a billionaire living among millionaires. Living as the only millionaire surrounded by billionaires probably sucks, but at least the amenities are probably going to be great and you know your neighbours aren't likely to rob you for $100. Living as a millionaire among slum dwellers (even if you live in the only nice house, just outside the slum), seems like it would really suck, but for different reasons.
People also care about the relative status of their peer group and associates (which influences their own status). That's part of the appeal of being a billionaire among millionaires. Being the best of the best is more appealing than being the best of the worst.
As others have pointed out, because people are engaged in global comparisons, not purely local ones, you can't improve your relative status by moving from Harvard to a much worse college. That would *lower* your relative status even if you become the best of the worst rather than the worst of the best.
A lot if people move to poorer countries to feel richer. Its just overall its a small proportion of people ( very few people move out of their country ).
A lot of expats like to feel rich and its often one of the main reasons they are expats.
"Lower cost of living" is exact that - to feel rich among the poor.
This only works if you can change your reference class at will just by moving. If you move, but you still care about what your old neighbours think, the move doesn't help. Worse, in an age of internet and celebrity gossip magazines, your reference class includes all the celebrities who moved into better neighborhoods than you can afford
That feels relevant, and not just old neighbors but coworkers (did you change jobs to a lower pay area but still retain high pay?) and family members as well.
A simple explanation is that people can't enjoy feeling superior if they know they intentionally sought out some inferiors to surround themselves with.
Suppose you are conscious about your weight/height, so you go out of your way to surround yourself with obese people/dwarves. I predict that anyone without an impressive capacity for self-delusion would probably feel more self-conscious about their weight/height, as a result of their strategy.
People measure themselves vs their peers. People in a poorer neighborhood are not considered their peers.
Here's a thought.
When do people not feel envious of another person's income or wealth?
When they love or admire what makes that other person rich such as your rock star, your surgeon, your squire.
When you are envious is when you don't readily see what makes them worthy.
I would actually flip this argument on its head. Rather than arguing this is "proof" that people don't care about relative income, I would say that this is a market inefficiency waiting to be arbitraged. Cultural norms run strongly against taking up Caplan's proposal, so the vast majority of people don't. Nevertheless, very many would be happy if they did so, I think. Perhaps another piece of life advice to add to the next book.
It is rather difficult to move though, without incurring other effects. Poorer places are often much more violent.
Not in Japan, for example. Do Japanese people frequently make use of this strategy?
If we were to flip the script and say people don’t necessarily want to be “have mores” they just don’t want to appear be “has less” then we’re in a better epistemic position.
Moving to a poor area would make you seem like a “has less” and that’s intolerable and why people don’t do it.
It’s essentially the same formula but with an inverted frame.
People are more oriented to avoiding sneers than seeking praise.
This is an insane headline.
Caplan obviously doesn’t spend much time with the masses on Instagram or LinkedIn and doesn’t track what social media is doing to children (which now includes people in their 30’s and 40’s).
I’d argue that people ONLY care about relative income. Countless books (like those by Pinker, et al) dwell on this reality where people think economic expansion is destroying society rather than profoundly improving our prognosis (politics aside).
Maybe the status associated with being a professor has worn off recently in his social circles while absolute income has become more popular.
This is off unfortunately.
Moving to a poorer area has consequences on many aspects of the surroundings that someone may desire.
Is anyone claiming ALL people care about is relative income? What I gather is it’s easy to poke at the envy impulse, that’s it. It’s easy for people to resent the success of others and explain it away as undeserved, ill gotten, stolen. The most ill gotten gains in society circa 2025 are likely from companies greasing the government. Inherited money may piss people off but passing down money is a motivator for many people to work hard.
- [ ] I found it beyond farcical a multimillionaire Liz Warren sold billionaire tear mugs. Everything about this was satire playing out in real life. She flipped housing, evil, but she’s out for the consumer who should be protected from arbitrarily defined too high prices except if she’s the seller. She invented an identity (to be fair she really seemed to believe it) that may have bumped up her income and most people don’t start reasoning maybe the problem is the people most benefiting from identity don’t need the benefit at all or at least anywhere near as much as those defined by class and distorted social environments. And if these identities are so bad in terms of current effect why are middle class and upper middle class and even wealthy people exploiting it. Can’t pick on millionaires because if you include housing wealth too many people make the cut. And what lifts up society- Making a profit off an objectively overpriced kitschy mug. It’s difficult to follow the logic of your article because it’s not like you can move to a poorer area and everything will just be the same for you. I agree most people don’t waste mental space comparing income in a broad sense though they may among friends or coworkers but envy is an unfortunately highly sensitive easily pushed button. Didn’t make the cut for a deadly sin for nothing. I’m writing this without my glasses so hopefully it’s in English
> Almost no one relocates to feel relatively rich. (In fact, isn’t this essay the first time you’ve heard anyone point out that this is even an option?!
My guess is that for at least some of the expats, it could be a motivation. Living in Russia in the 90s, it certainly felt that way.
"Almost no one relocates to feel relatively rich. (In fact, isn’t this essay the first time you’ve heard anyone point out that this is even an option?!)"
Nope, Americans move to places where their wealth makes them locally powerful all the time. Thailand. Costa Rica. Digital nomads. Sex tourism. Playing the token American for a local corporation. You're usually sharper than this, Dr. Caplan.
Not sure I agree with the premises here.
Feel like I see a lot of articles about people moving out of higher cost areas to lower cost areas? "Why I Left New York/San Francisco" is a whole genre unto itself.
The process of gentrification you describe is basically what actually happens.
And developers try to build affordable housing near mansions all the time, they're just stopped by zoning laws (as I expect you're well aware since you wrote a YIMBY book). The weird thing would be if people tried to build mansions next to affordable housing (instead of vice versa). But people living in mansions are already relatively rich even in their rich neighborhoods, so that doesn't support your thesis.
"People relocate to get a better job, to be closer to family, for a lower cost of a living"
Note that last bit.
Yes, though I think Bryan is unfairly excluding a lot of counterexamples if "lower cost of living" is defined out. It might be theoretically possible to move to a lower cost of living area without making the person relatively richer, but I would struggle to think of an example. And talking about moving for "lower cost of living" is politer than saying "I want to feel superior to my neighbors," so I'm not surprised people focus on the former.
"for a lower cost of a living"
This is really circular. Poorer places have cheaper cost of living. Part of the reason CA/NY have such high housing prices is that they have such high incomes.
It seems to me that everyone makes a tradeoff between earning potential and cost of living, which are usually in tension because a lot of the goods we care about are positional rival goods and a lot of earning potential is network effects.
You see people relocate to poorer areas when they are able to retain their income independent of place and live around people like themselves. So retirees, full time work from home, etc.
Real estate near high income potential gets bid up, and supply doesn't increase to keep the cost down. In part because "keeping out the riff raff" is part of the value of real estate, and high earning areas require higher prices to keep out the riff raff.
Discrimination might help in this case (keep out the riff raff based on something other then price), but we got the fair housing act and all that.
Austin has lower cost of living because it's legal to build there.
Travis County which contains Austin has a per capita personal income of 60k.
Santa Clara is 150k.
A single family home in Travis County costs $500k. In Santa Clara its 1.86M.
1.86M / 150k = 12.4
500k / 60k = 8.33
Now 12.4 vs 8.33 ain't nothing to sneeze at. Income adjusted housing in Austin is 1/3 cheaper.
But non-income adjusted housing is 75% cheaper. Income differences are still doing a lot of the work here.
Is it the case that one can move to a low income area and retain their current income? Caplan talks wealth, but high income for most people is what drives that, working stiffs that they are. I don’t think I could move to a poorer part of Alabama and get the same salary, for example.
There's another reason why people would not adopt this strategy even if they care about relative income: being surrounded by people with low *absolute* income is associated with bad effects i.e. your neighbours and your neighborhood are going to be more likely to suffer from various dysfunctions.
The ideal situation is: (i) your absolute income is high, (ii) your neighbours' absolute income is high, (iii) your income is relatively higher than theirs, e.g. you're a billionaire living among millionaires. Living as the only millionaire surrounded by billionaires probably sucks, but at least the amenities are probably going to be great and you know your neighbours aren't likely to rob you for $100. Living as a millionaire among slum dwellers (even if you live in the only nice house, just outside the slum), seems like it would really suck, but for different reasons.
People also care about the relative status of their peer group and associates (which influences their own status). That's part of the appeal of being a billionaire among millionaires. Being the best of the best is more appealing than being the best of the worst.
As others have pointed out, because people are engaged in global comparisons, not purely local ones, you can't improve your relative status by moving from Harvard to a much worse college. That would *lower* your relative status even if you become the best of the worst rather than the worst of the best.
Handing out money to the most crime-ridden neighborhoods would make their absolute income higher. But they'd still have those dysfunctions.
Irrelevant to my claim that crime and low income are associated.
A lot if people move to poorer countries to feel richer. Its just overall its a small proportion of people ( very few people move out of their country ).
A lot of expats like to feel rich and its often one of the main reasons they are expats.
"Lower cost of living" is exact that - to feel rich among the poor.