relates or aspires to relate him 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 hypothesized that individuals compare themselves with reference groups of people who occupy the social role to which the individual aspires.[Merton] developed a theory of the reference group (i.e., the group to which individuals compare themselves, which is not necessarily a group to which those individuals belong), and elaborated on the concepts of in-group and out-group. For any group of people there are always other groups whom they look upon to and aspire to be like them.Such 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. with an annual income of $80,000, may consider themself affluent if they compare themself 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 of $80,000 would make them consider themself as rather poor. SEB Examples Basic groups: The smallest possible social group with defined number of people (i.e. greater than 1)—often associated with family building: Dyad: A group of two people. Social interaction in a dyad is typically more intense than in larger groups as neither member shares the other's attention with anyone else. (See also couple.) Triad: A group of three people. Triads are generally more stable than dyads because one member can act as a mediator should the relationship between the other two become strained. Family, Household: Small group of people who live in the same home. Family may or may not form clan, fellowship, larger kinship groups, or a basic unit of community. Various cultures include different models of