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> Poverty is such a relative thing. I ran across an anecdote where it was found that people would rather make $80K/year in a neighbourhood where everyone else
by throw0101a 5y ago
> Poverty is such a relative thing.
I ran across an anecdote where it was found that people would rather make $80K/year in a neighbourhood where everyone else made $70K, rather than make $90K where everyone else made $100K.
- hackflip 5y agoIf the extra 10k is only 6k post-tax, and the cost of living increases by more than 6k between the 70k neighborhood and the 100k neighborhood, it can sometimes be the financially rational decision.
- samatman 5y agoExactly so. At least in the US, most of the mandatory budget goes to "the neighborhood" in the form of rent or mortgage, and people know this. Especially when we're talking about small numbers percent-wise, the intuition that it's better to be earning slightly more than your neighbors, rather than slightly less, is accurate. It translates to more discretionary income, more savings, more optionality.