Status works like OP describes, when going from "dregs" to "valued community member". Social safety is a very basic need, and EA membership undermines that for many people by getting them to compare themselves to famous EAs, rather than to a more realistic peer group. This is especially true in regions with a lower density of EAs, or where all the 'real' EAs pack up and move to higher density regions.
I think the OP meant "high" as a relative term, compared to many people who feel like dregs.
People don't have that amount of fine control over their own psychology. Depression isn't something people 'do to themselves' either, at least not with the common implications of that phrase.
Also, this was a minimal definition based on a quick search of relevant literature for demonstrated effects, as I intended to indicate with "at least". Effects of objectification in the perpetrator are harder to disentangle.
'Happiness' is a vague term which refers to various prominent sensations and to a more general state, as vague and abstract as CEV (e.g. "Life, Liberty, and the pursuit of Happiness"). 'Headache', on the other hand, primarily refers to the sensation.
If you take an aspirin for a headache, your head muscles don't stop clenching (or whatever else the cause is); it just feels like it for a while. A better pill would stop the clenching, and a better treatment still would make you aware of the physiological cause of the clenching and allow you to change it to your liking.
Having a good factual model of a person would be necessary, and perhaps sufficient, for making that judgment favourably. When moving beyond making people more equal and free in their means, the model should be significantly better than their self-model. After that, the analyst would probably value the thus observed people caring about self-determination in the territory (so no deceiving them to think they're self-determining), and act accordingly.
If people declare that analysing people well enough to know their moral values is itself being a busybody, it becomes harder. First I would note that using the internet without unusual data protection already means a (possibly begrudging) acceptance of such busybodies, up to a point. But in a more inconvenient world, consent or prevention of acute danger are as far as I would be willing to go in just a comment.
Be careful when defining the winner as someone other than the one currently sitting on a mound of utility.
Most lesswrong users at least profess to want to be above social status games, so calling people out on it increases expected comment quality and personal social status/karma, at least a little.
Small correction: you want to buy the widget as long as x > 7/8 .
You should also almost never expect x>1, because that means you should immediately spend your money on that cause until x becomes 1 or you run out of credit. x=1 means that something is the best marginal way to allocate money that you know of right now.