Money is in the Eye of the Beholder

From Smithsonian:

MoneyA recent thread on the urban parenting site asked a simple pair of questions: What is your household income, and how rich do you feel? The resulting contradictions of income and perceived wealth drew widespread remarkand some scorn. One commenter, from New York City’s Upper East Side, makes $350,000 per year and feels “so, so, so poor.” Another earns $1.2 million and feels upper-middle class, while a third, with an income in the $180,000 range in the D.C. suburbs, feels rich. How is this all possible? Everyone knows the old platitude “beauty is in the eye of the beholder.” A recent psychological study indicates that wealth is just the same. A new paper, published in the January issue of Psychological Science by Princeton researcher Abigail Sussman, demonstrates that total net worth is not the only thing that influences perceptions of wealth, whether for ourselves or others. If you were asked to consider two individuals—Mr. Blue, who has $120,200 in assets and $40,200 in debt, and Ms. Green, who has $80,200 in assets and just $200 in debt—who do you think is better off? Of participants in the study, 79% said Ms. Green, although net worth is the same for both. When assessing those with positive net worth, having a lower degree of both assets and debt was seen as better than having more of each.

More here.