This paper examines whether subjective life-satisfaction is most strongly related to absolute or relative income in terms of either proximal neighbors or a wider aggregated region. The analysis utilizes two unique datasets - survey data on happiness in combination with finelevel income data for postal codes and municipalities. We find a significant relationship between happiness and both personal income and relative income position among nearby neighbors and more remote neighbors. Hence, being rich as well as being richer than others in the area increases the likelihood of being more satisfied with life. Above all, we find individuals’ level of life-satisfaction to be more strongly related to the income of people in the larger municipality than to the income of nearby neighbors.