Reference group
A reference group is a concept referring to a group
Group (sociology)
In the social sciences a social group can be defined as two or more humans who interact with one another, share similar characteristics and collectively have a sense of unity...

 to which an individual or another group is compared.

Sociologists call any group that individuals use as a standard for evaluating themselves and their own behavior a reference group.

Reference groups are used in order to evaluate and determine the nature of a given individual or other group's characteristics and sociological attributes. It is the group to which the individual relates or aspires to relate himself or herself psychologically. It becomes the individual's frame of reference and source for ordering his or her experiences, perceptions, cognition, and ideas of self. It is important for determining a person's self-identity, attitudes, and social ties. It becomes the basis of reference in making comparisons or contrasts and in evaluating one's appearance and performance.

Reference groups provide the benchmarks and contrast needed for comparison and evaluation of group and personal characteristics. Robert K. Merton
Robert K. Merton
Robert King Merton was a distinguished American sociologist. He spent most of his career teaching at Columbia University, where he attained the rank of University Professor...

 hypothesized that individuals compare themselves with reference groups of people who occupy the social role to which the individual aspires.
Reference groups act as a frame of reference to which people always refer to evaluate their achievements, their role performance, aspirations and ambitions. A reference group can be either from a membership group or non-membership group.
An example of a reference group being used would be the determination of affluence. An individual in the U.S.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 with an annual income
Income in the United States
Income in the United States is measured by the United States Department of Commerce either by household or individual. The differences between household and personal income is considerable since 42% of households, the majority of those in the top two quintiles with incomes exceeding $57,658, now...

 of $80,000, may consider himself affluent
Affluence in the United States
Affluence in the United States refers to an individual's or household's state of being in an economically favorable position in contrast to a given reference group...

 if he compares himself to those in the middle of the income strata, who earn roughly $32,000 a year,. If, however, the same person considers the relevant reference group to be those in the top 0.1% of households in the US, those making $1.6 million or more, then the individual's income
Personal income in the United States
Personal income is an individual’s total earnings from wages, investment interest, and other sources. In the United States the most widely cited personal income statistics are the Bureau of Economic Analysis’s personal income and the Census Bureau’s per capita money income...

of $80,000 would make him or her seem rather poor.
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