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Is it better to be a big fish in a small pond, or a small fish in a big pond? For example, if you are considering college, is it better to go to an elite school like Harvard or Yale, where you might only be average? Or is it better to go to a decent school like the University of Illinois (my alma mater), where you can be the best?

Most people would probably say it’s better to go to the elite school. There are some advantages to this route. The professors are likely world-class and leaders in their fields. The class sizes are smaller. The connections you make at the elite school could help your job prospects down the road.

But there are some drawbacks to the elite school as well. When we compare ourselves to others, we don’t usually make general comparisons to all people. Instead, we compare ourselves to others in our own group. So Yale students compare themselves to other Yale students, University of Illinois students compare themselves to other U of I students, and so on.

In his book David and Goliath, Malcolm Gladwell presented some interesting research showing that students who placed in the bottom third at elite schools were more likely to drop out of math and science majors than students who placed in the top third at average schools, even though their test scores were almost identical.

How could this be? Their test scores were the same, so we can assume these groups of students had about the same level of math ability. The difference, however, was the comparison group. Students at the average schools were comparing themselves to other average students, and they felt competent and good about themselves. Students at the elite schools, on the other hand, were comparing themselves to other elite students, and they didn’t measure up. Eventually, these students dropped out and chose a different career path, even though they likely could have succeeded in a different setting.

In a similar vein, our level of happiness can depend on our comparison group. Carol Graham did some research where she compared levels of happiness between individuals in Chile and Honduras. You might think that a poor person in Chile would be better off than a poor person in Honduras. Because Chile has a more developed economy, a poor person in Chile makes more money and can enjoy a higher standard of living than a poor person in Honduras.

But the opposite is actually true! A poor person in Honduras is happier, even though they are objectively worse off. The answer to this paradox again lies in the nature of the comparison group. Poor people in Honduras compare themselves with other people in Honduras (who are also mostly poor), so they tend to feel better about their situation than poor people in Chile (who see a lot of rich folks walking around).

What does this mean for the decisions we make in our lives? We usually think that we should aim for the absolute best school, job, etc. But this isn’t always the case. Our context and comparison group makes a big difference for our opportunities (e.g., Yale engineering major who ends up switching to sociology) and our happiness (e.g., unhappy person in Chile).

Discussion: What do you think about the effect of context on our opportunities and happiness? Do you think it’s better to be a big fish in a small pond, or a small fish in a big pond?