Money may not buy happiness, but people can be satisfied knowing they have more of it than their peers, according to a British study.

The study, published this month in the journal Psychological Science, found that people were more likely to be happy if they had a larger income or more material possessions than their peers, something researchers term the "rank-income hypothesis."

Those who had a high income — but no higher than their peers — tended to be no happier than someone with a low income.

Researchers from the University of Warwick tracked data gathered by the British Household Panel Survey between 1997 and 2004. They wanted to see why happiness has not risen in conjunction with household income, which has risen over the same period.

"We're trying to explain why after years and years of economic growth — high income growth — average happiness across the nation has actually remained fairly flat," said psychologist Christopher Boyce in an interview Tuesday with CBC Radio's As It Happens.

"If you look across the income distribution, people at the top do tend to be somewhat happier … but it's the ranking that is actually important."

Boyce's research team analyzed survey data from 10,000 British participants who answered several questions, including how satisfied they were with their life, on a scale of one to seven.

They found absolute income was not an indication of happiness and that happiness based only on rising income levels was likely to be short-lived, "because other people will try to catch up with you."

"If you do have a bigger house in the neighbourhood, that might encourage everyone else being dissatisfied with their houses to make their house bigger, and by doing that, they'll lessen their dissatisfaction," said Boyce. "So it's a no-win game, really. You can easily get locked into this race for status."

Boyce said there are lessons to be learned from the study's findings.

"When it comes to chasing money for money's sake, I think there's only a limited amount of happiness you can get from that, and as a result, everyone seems to want to work a lot harder and more than they'd ideally like to.

"I think there are better ways to increase your well-being and your happiness generally, and that's focusing away from income. It does seem to be a kind of zero sum game that, overall, no one can become more satisfied."