"In questions inserted into the 2008 module of the German-Socio Economic Panel we ask subjects to report their income relative to different reference groups, such as fellow employees, other people in their profession, same age and same gender groups, friends, and neighbours. In addition subjects report how important to them is each of these comparisons. Using these data we are able to study how important income comparisons are to subjective well-being, and which comparisons are relatively more important. We find substantial gender differences, with income comparisons being much better predictors of subjective well-being in men than in women. Generic (same-gender) comparisons are the most important, followed by within profession comparisons. Once generic and within-profession comparisons are controlled for, income relative to neighbours has a negative coefficient, suggesting that a good quality neighbourhood increases happiness with little loss due to negative relative comparisons. The perceived importance of income comparisons is uncorrelated with actual importance. However, subjects who judge comparisons to be important are significantly less happy than subjects who see income comparisons as unimportant. The marginal effect of relative income on subjective well-being does not depend on whether a subject is below or above the reference group income. "

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