Spiteful egalitarianism?

This article -- Neighbors as Negatives, by Erzo F.P. Luttmer -- intrigued me.

[D]o people care about relative position and does lagging behind the Joneses' diminish well-being? To answer this question, I match individual-level panel data containing a number of indicators of well-being to information about local average earnings. I find that, controlling for an individual's own income, higher earnings of neighbors are associated with lower levels of self-reported happiness. The data's panel nature and rich set of measures of well-being and behavior indicate that this association is not driven by selection or by changes in the way people define happiness. There is suggestive evidence that the negative effect of increases in neighbors' earnings on own well-being is most likely caused by interpersonal preferences people having utility functions that depend on relative consumption in addition to absolute consumption.

....Do people actually feel worse off when those around them are richer?

I was directed to this just after finishing a marvelous new assessment of Joseph Stalin, who was of course an unsurpassed master at harnessing spiteful egalitarianism. Kulaks weren't hauled off to Siberia because masses were starving, but because their less affluent neighbors hated them and were willing to denounce them. (Actually, the masses starved largely because the successful Kulaks were no longer there to produce the food they needed!)

Similarly, the human weakness identified by Luttmer has little to do with the meeting of actual human needs, such as food or transportation. The hatred of neighbor for neighbor is based more on whether the neighbor has a more expensive (or later model) car, a house with slicker improvements, etc.

Reading the article, I saw distinct hints that shame might lie at the bottom of the problem:

The results are stronger for those who socialize more with neighbors but not for those who socialize with friends outside the neighborhood.

....[T]he negative effect of neighbors' earnings on well-being [] is real and most likely caused by a psychological externality, i.e. people having utility functions that depend on relative consumption in addition to absolute consumption.

The size of the effect is economically meaningful. An increase in neighbors' earnings and a similarly sized decrease in own income each have roughly the same effect on well-being. This suggests that an increase in own income leads to a negative externality on neighbors' well-being that is of the same order of magnitude as the positive effects on own well-being. Unless one chooses to disallow these negative externalities on the ground that they appear to stem from a interpersonal preference component that is morally questionable, externalities of this size can in principle substantially affect the optimal policies dealing with income taxation, consumption taxation, and residential sorting.

Is that why there's so much fuss these days about "self-esteem"?

I can't speak for God, but regardless of who wrote it, I think the Tenth Commandment was damned good advice.

(Probably why they put it last.)