It pays not to know your colleagues' pay

People like you get on my nerves. That is, if you are paid more than I am. And if we work together. Apart from that you're fine. This is on the basis of this recent NBER paper which looks at how work satisfaction is diminished when people find out how much more their colleagues are paid. Knowing how much less some colleagues are paid on the other hand doesn't matter. So there is envy but no smugness. That's something I suppose. Sometimes a little knowledge is a dangerous thing.

Inequality at Work: The Effect of Peer Salaries on Job Satisfaction
David Card, Alexandre Mas, Enrico Moretti, Emmanuel Saez

Economists have long speculated that individuals care about both their absolute income and their income relative to others. We use a simple theoretical framework and a randomized manipulation of access to information on peers' wages to provide new evidence on the effects of relative pay on individual utility. A randomly chosen subset of employees of the University of California was informed about a new website listing the pay of all University employees. All employees were then surveyed about their job satisfaction and job search intentions. Our information treatment doubles the fraction of employees using the website, with the vast majority of new users accessing data on the pay of colleagues in their own department. We find an asymmetric response to the information treatment: workers with salaries below the median for their pay unit and occupation report lower pay and job satisfaction, while those earning above the median report no higher satisfaction. Likewise, below-median earners report a significant increase in the likelihood of looking for a new job, while above-median earners are unaffected. Our findings indicate that utility depends directly on relative pay comparisons, and that this relationship is non-linear.

Peer effects and fitness

This paper addresses whether fitness is contagious arising from recent claims that such peer or contagion effects may partly explain the increase in obesity. It is worth noting that the data is drawn from students at the US Air Force Academy, a very selective institution with a generally pretty fit bunch of people. It seems doubtful that this data will allow one to identify anything about obesity in the population.

Is Poor Fitness Contagious? Evidence from Randomly Assigned Friends
Scott E. Carrell, Mark Hoekstra, James E. West
NBER w16518
The increase in obesity over the past thirty years has led researchers to investigate the role of social networks as a contributing factor. However, several challenges make it difficult to demonstrate a causal link between friends’ physical fitness and own fitness using observational data. To overcome these problems, we exploit data from a unique setting in which individuals are randomly assigned to peer groups. We find statistically significant peer effects that are 40 to 70 percent as large as the own effect of prior fitness scores on current fitness outcomes. Evidence suggests that the effects are caused primarily by friends who were the least fit, thus supporting the provocative notion that poor physical fitness spreads on a person-to-person basis.