Background The study investigated whether perceived relative position was associated with mental well-being for people living in deprived areas, as a contribution to debates about income inequality, relative deprivation and health.

Methods A survey of 4615 residents of deprived areas of Glasgow measured mental well-being using the WEMWBS scale. Perceived relative position was assessed locally and across wider society in relation to housing, neighbourhood and standard of living. Personal and dwelling characteristics were controlled for.

Results Mental well-being was found to be positively associated with: perceived relative quality (RR 4.1, 95% CI 2.4 to 6.8) and status (RR 7.1, 95% CI 4.5 to 11.1) of the home; perceived internal reputation of the neighbourhood (RR 4.9, 95% CI 2.9 to 8.2), though not external reputation; and perceived relative standard of living (RR 5.2, 95% CI 3.2 to 8.4). Furthermore, respondents who thought they lived in an area where some people had higher incomes than others also reported higher mental well-being (RR 4.5, 95% CI 2.2 to 9.1), controlling for the effects of their own income.

Conclusion Studies of inequality and health could give more consideration to the importance of the residential domain of housing and neighbourhood to mental well-being outcomes, via the psychosocial pathway. The local spatial scale may be more important to issues of relative deprivation than previously thought, as people make local as well as broader comparisons. The ability to make upward comparisons of income within deprived areas may be beneficial to residents rather than detrimental, possibly as an indicator of area progress and ‘normality’.