This article provides unprecedented direct evidence from large‐scale survey data on both the intensity (how much?) and direction (to whom?) of income comparisons. Income comparisons are considered to be at least somewhat important by three‐quarters of Europeans. They are associated with both lower levels of subjective well‐being and a greater demand for income redistribution. The rich compare less and are happier than average when they do, which latter is consistent with relative income theory. With respect to the direction of comparisons, colleagues are the most frequently‐cited reference group. Those who compare to colleagues are happier than those who compare to other benchmarks.

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Using individual‐level data from a large number of countries, this paper examines how self‐reported subjective well‐being depends on own income and reference income, where reference income is defined as the income of one's professional peers. It uncovers a divide between ‘old’—low‐mobility—European countries on the one hand, and ‘new’ European post‐Transition countries and the United States on the other. The relative importance of comparisons (‘jealousy’) versus information (‘ambition’) seems to depend on the degree of mobility and uncertainty in the considered countries.