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Personality and economic choices

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  • Boyce, Christopher
  • Czajkowski, Mikołaj
  • Hanley, Nick

Abstract

There is substantial variation in individual preferences for public goods, yet much of that variation remains poorly understood. However, simple measures of personality can help to explain economic values and choices in a systematic way. In this paper, we examine the effects of personality on individual economic choices over public environmental goods. Based on three datasets from three separate stated preference studies, we use a hybrid choice econometric framework to examine the effects of personality on preferences for the status quo, changes in environmental quality, and costs of investing in environmental improvements. We find effects that are consistent across all datasets. Personality, a stable feature of an individual's character that is simple to measure, enriches explanations of why the demand for environmental goods varies across people, provides an indication of how different people are likely to react to the introduction of environmental policies, and explains substantial differences in Willingness to Pay.

Suggested Citation

  • Boyce, Christopher & Czajkowski, Mikołaj & Hanley, Nick, 2019. "Personality and economic choices," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 82-100.
    • Handle: RePEc:eee:jeeman:v:94:y:2019:i:c:p:82-100
    DOI: 10.1016/j.jeem.2018.12.004
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    9. Andreas Ziegler, 2020. "New Ecological Paradigm meets behavioral economics: On the relationship between environmental values and economic preferences," MAGKS Papers on Economics 202020, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
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    More about this item

    Keywords

    Personality; Preference heterogeneity; Hybrid choice models; Stated preferences; Choice models;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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