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Personality and wealth accumulation among older couples: Do dispositional characteristics pay dividends?

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  • Mosca, Irene
  • McCrory, Cathal

Abstract

This paper explores whether the ‘Big 5’ personality characteristics: Emotional Stability, Extraversion, Conscientiousness, Agreeableness, and Openness to Experience, contribute to net household wealth accumulation among 1172 couple pairs (n=2344) participating in The Irish Longitudinal Study on Ageing, independent of other socio-demographic and human capital variables. We employ quantile regression to determine whether the effects of personality vary at different levels of the conditional distribution of wealth. Results reveal that the personality characteristics of the financial respondent to the survey are more strongly associated with wealth than those of the non-financial respondent. Specifically, we find that emotional stability and extraversion are positively associated with wealth at the household level among spousal pairs. We also find that conscientiousness is positively associated with wealth, but the relationship is only significant at the lower end of the wealth continuum. In general, agreeableness and openness are negatively associated with wealth although the relationships are non-significant. These findings indicate that personality is an important factor shaping individuals’ consumption preferences and financial decision-making behaviour over the life-course.

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  • Mosca, Irene & McCrory, Cathal, 2016. "Personality and wealth accumulation among older couples: Do dispositional characteristics pay dividends?," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 1-19.
    • Handle: RePEc:eee:joepsy:v:56:y:2016:i:c:p:1-19
    DOI: 10.1016/j.joep.2016.04.006
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    6. Doorley, Karina & Nolan, Anne, 2019. "The Determinants of Retirement Planning within Couples in Ireland," IZA Discussion Papers 12188, Institute of Labor Economics (IZA).
    7. Gerhard, Patrick & Gladstone, Joe J. & Hoffmann, Arvid O.I., 2018. "Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity," Journal of Economic Behavior & Organization, Elsevier, vol. 148(C), pages 66-82.
    8. Nolan, Anne & Doorley, Karina, 2019. "Financial Literacy and Preparation for Retirement," IZA Discussion Papers 12187, Institute of Labor Economics (IZA).
    9. Wu, Bangzheng & Yue, Pengpeng & Zuo, Shengqiang, 2023. "Borrow to be the poor or the rich? It depends: Credit market and wealth accumulation," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 804-821.
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    More about this item

    Keywords

    Personality traits; Big five; Non-cognitive traits; Wealth accumulation; Cohort study;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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