This paper examines the role of income aspirations in individual happiness, using a direct empirical approach. The study finds that higher income aspirations reduce people's satisfaction with life, ceteris paribus. Individual data on reported life satisfaction are used as a proxy for utility, while income evaluation measures serve as proxies for aspiration levels. Consistent with adaptation and social comparison processes, income aspirations increase with both personal income and the average income in the community. The results suggest that subjective well-being depends on the gap between income aspirations and actual income rather than the absolute income level. The paper also explores the impact of social comparisons within communities and the potential endogeneity bias in reported aspiration levels. Overall, the findings support the concept of relative utility and provide insights into why people in industrialized societies have not become happier despite economic growth.This paper examines the role of income aspirations in individual happiness, using a direct empirical approach. The study finds that higher income aspirations reduce people's satisfaction with life, ceteris paribus. Individual data on reported life satisfaction are used as a proxy for utility, while income evaluation measures serve as proxies for aspiration levels. Consistent with adaptation and social comparison processes, income aspirations increase with both personal income and the average income in the community. The results suggest that subjective well-being depends on the gap between income aspirations and actual income rather than the absolute income level. The paper also explores the impact of social comparisons within communities and the potential endogeneity bias in reported aspiration levels. Overall, the findings support the concept of relative utility and provide insights into why people in industrialized societies have not become happier despite economic growth.