Let's see gold. I can be unhappy knowing that 10% people in my country owns 90% of the GDP, that's especially true for I'm one of the other 90% that shares the rest. But I'd be much more unhappy if I could not pay for my roof, my clothes and a doctor when I need it.
Actually modern psychology suggests the exact opposite of what you describe. I mean yes there are minimal thresholds, if you don't have certain basic needs, you are not going to be happy. But beyond that, Humans function on comparatives not absolutes. If I have more than my neighbors, even if its not a lot, I will feel more satisfaction than the rich man who is at the "bottom tier" of his rich friends.
And that comparison is mostly local. If I'm the "big fish in the small pond" I generally show more satisfaction, even if I know there's a larger pond out there.
Now the interesting shift that is very recent is the "Globalization of Desire". Kids growing up on the Internet now really see how the rest of the world lives, and are starting to compare themselves to that. But that is a very recent phenomena, for the vast majority of history, people only knew about their immediate neighbors. So an empire comparison does make more RL sense than a Global one. Heck, from a realism standpoint, its even unrealistic for people to compare themselves to other cities in your empire....as most of them would have very little connection to those other places. So the empire comparison is still unrealistic for a majority of history....but its still one step closer.
So I'm not worried about the rationale. What I do want to see is, does this system allow for infinite expansion? Can I just blast the world with my cities and suffer only minor unhappiness by keeping all of my cities at barebones standards? And if I can...is that actually a winning strategy? Ultimately both have to be yes in order for that to be a problem.