It's obviously bad for your well-being to keep up with the Kardashians, but keeping up with the plain old Joneses is a bad idea too. One study from a couple years back found that people's happiness went down as their neighbor's income went up. That was true even controlling for personal income. No matter how much you actually made, it upset you just to know the Joneses made a little bit more.
Add another guy-next-door grievance to the pile: a group of psychologists suspects that living in a wealthy neighborhood might make you more materialistic. The researchers found that living in and around high incomes predicts "greater desires for material consumption, more impulsive buying, and fewer savings behaviors." They report their findings in the Journal of Consumer Culture.
The study was pretty straightforward. The researchers recruited roughly 2,700 test participants to complete an online survey that measured materialism and spending behavior through several established questionnaires. Meanwhile they captured demographic data and the socioeconomic status of a person's neighborhood — the latter measured by per capita income, poverty rate, and local financial institutions.
When controlling for things like age, gender, and personal income, the researchers still found a strong connection between high neighborhood wealth and materialistic tendencies. They suspect this all comes back to keeping up with the Joneses. If you live around nice things, you reflect on your own standing by comparison — a habit that can create a feeling of "relative deprivation":
We suspect that neighborhood SES increases materialism because it prompts individuals to compare their financial situation with others within their neighborhood; and this social comparison influences individuals to consume impulsively and to spend rather than save as a means of maintaining their social status.
So people see what others have, desire those same things, and expend their own resources to catch up. Even if they succeed they then convey a wealth they don't have and must spend even more to keep up a lifestyle they can't afford.
There are caveats, to be sure, as well as other factors to consider. The study could not show that living near wealth caused materialism; just that the two were linked. Materialistic people might self-select into these neighborhoods, moving there to be around the wealth they admire. And mere exposure to materialism — having luxury advertisements or items in the area — might play as big a part as direct neighborly comparisons.
In any case, the larger problem here is that materialism itself has been linked with reduced well-being. So people who are unhappy knowing their neighbors make more money can become even less happy as they embrace the material habits that surround them. The looming question, as income disparity widens, is whether the growing gap between ourselves and the Joneses will cause us to lose sight of them or to chase even harder.