Rising incomes vs. Happiness

Another good Economist piece on rising income levels and people's happiness (note - the article doesn't take into account inflation and I throughly disagree with the increasing tax rates to make people happier part at the end that was proposed by Lord Laynard).

This part was especially interesting and definitely rang a bell...

A second and more important reason why more money does not automatically make everybody happier is that people tend to compare their lot with that of others. In one striking example, students at Harvard University were asked whether they would prefer (a) $50,000 a year while others got half that or (b) $100,000 a year while others got twice as much. A majority chose (a). They were happy with less, as long as they were better off than others. Other studies confirm that people are often more concerned about their income relative to others' than about their absolute income. Pleasure at your own pay rise can vanish when you learn that a colleague has been given a much bigger one. The implication of all this is that people's efforts to make themselves happier by working harder in order to earn and spend more are partly self-defeating: they may make more money, but because others do too, they do not get much happier.