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The Relationship Between Economic Preferences and Psychological Personality Measures

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Author Info

  • Becker, Anke

    ()
    (University of Bonn)

  • Deckers, Thomas

    ()
    (University of Bonn)

  • Dohmen, Thomas

    ()
    (University of Bonn)

  • Falk, Armin

    ()
    (University of Bonn)

  • Kosse, Fabian

    ()
    (University of Bonn)

Abstract

Although both economists and psychologists seek to identify determinants of heterogeneity in behavior, they use different concepts to capture them. In this review we first analyze the extent to which economic preferences and psychological concepts of personality – such as the Big Five and locus of control – are related. We analyze data from incentivized laboratory experiments and representative samples and find only low degrees of association between economic preferences and personality. We then regress life outcomes – such as labor market success, health status and life satisfaction – simultaneously on preference and personality measures. The analysis reveals that the two concepts are rather complementary when it comes to explaining heterogeneity in important life outcomes and behavior.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6470.

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Length: 44 pages
Date of creation: Apr 2012
Date of revision:
Publication status: published online in: Annual Review of Economics, 2012, [Review in Advance]
Handle: RePEc:iza:izadps:dp6470

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Related research

Keywords: risk preference; time preference; social preferences; Big Five; locus of control;

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References

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  1. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  2. Borghans, Lex & Duckworth, Angela Lee & Heckman, James J. & ter Weel, Bas, 2008. "The Economics and Psychology of Personality Traits," IZA Discussion Papers 3333, Institute for the Study of Labor (IZA).
  3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  4. Michael Daly & Liam Delaney & Colm P. Harmon, 2009. "Psychological and Biological Foundations of Time Preference," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 659-669, 04-05.
  5. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Development Research Unit Working Paper Series archive-03, Monash University, Department of Economics.
  6. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2008. "Representative trust and reciprocity: Prevalence and determinants," Munich Reprints in Economics 20057, University of Munich, Department of Economics.
  7. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2010. "Are risk aversion and impatience related to cognitive ability?," Munich Reprints in Economics 20063, University of Munich, Department of Economics.
  8. Lex Borghans & Bart H.H. Golsteyn & James J. Heckman & Huub Meijers, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," NBER Working Papers 14713, National Bureau of Economic Research, Inc.
  9. Mathilde Almlund & Angela Lee Duckworth & James J. Heckman & Tim D. Kautz, 2011. "Personality Psychology and Economics," NBER Working Papers 16822, National Bureau of Economic Research, Inc.
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  11. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2009. "Homo Reciprocans: Survey Evidence on Behavioural Outcomes," Munich Reprints in Economics 20055, University of Munich, Department of Economics.
  12. Armin Falk & Urs Fischbacher, . "A Theory of Reciprocity," IEW - Working Papers 006, Institute for Empirical Research in Economics - University of Zurich.
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  14. Armin Falk & Ernst Fehr & Urs Fischbacher, 2005. "Driving Forces Behind Informal Sanctions," Econometrica, Econometric Society, vol. 73(6), pages 2017-2030, November.
  15. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe & Schupp, Jürgen & Wagner, Gert G., 2009. "Individual risk attitudes: Measurement, determinants and behavioral consequences," Munich Reprints in Economics 20049, University of Munich, Department of Economics.
  16. Eckel, Catherine C. & Grossman, Philip J., 1996. "Altruism in Anonymous Dictator Games," Games and Economic Behavior, Elsevier, vol. 16(2), pages 181-191, October.
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  20. Ernst Fehr, 2009. "On The Economics and Biology of Trust," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 235-266, 04-05.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Papers on Personality and Economics
    by Liam Delaney in Economics and Psychology Research on 2012-04-18 10:30:00
  2. Journal session on personality and economics
    by Liam Delaney in Economics and Psychology Research on 2012-05-04 12:58:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Benjamin Volland, 2013. "Conscientious consumers? Preferences, personality and expenditure in the UK," Papers on Economics and Evolution 2013-05, Max Planck Institute of Economics, Evolutionary Economics Group.
  2. James Heckman & Tim Kautz, 2013. "Fostering and Measuring Skills: Interventions That Improve Character and Cognition," Working Papers 2013-019, Human Capital and Economic Opportunity Working Group.
  3. Krause, Annabelle, 2012. "Don't Worry, Be Happy? Happiness and Reemployment," IZA Discussion Papers 7107, Institute for the Study of Labor (IZA).
  4. Shelly Lundberg, 2010. "Personality and Marital Surplus," SOEPpapers on Multidisciplinary Panel Data Research 307, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. Friehe, Tim & Schildberg-Hörisch, Hannah, 2014. "The Individual and Joint Performance of Economic Preferences, Personality, and Self-Control in Predicting Criminal Behavior," IZA Discussion Papers 7894, Institute for the Study of Labor (IZA).
  6. Thomas Deckers & Armin Falk & Hannah Schildberg-Hörisch, 2013. "Nominal or Real?: The Impact of Regional Price Levels on Satisfaction with Life," SOEPpapers on Multidisciplinary Panel Data Research 560, DIW Berlin, The German Socio-Economic Panel (SOEP).
  7. Krause, Annabelle, 2013. "Don’t worry, be happy? Happiness and reemployment," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 1-20.
  8. LEE SunYoun & OHTAKE Fumio, 2014. "The Effects of Personality Traits and Behavioral Characteristics on Schooling, Earnings, and Career Promotion," Discussion papers 14023, Research Institute of Economy, Trade and Industry (RIETI).
  9. Daniel D. Schnitzlein & Jens Stephani, 2013. "Locus of Control and Low-Wage Mobility," SOEPpapers on Multidisciplinary Panel Data Research 589, DIW Berlin, The German Socio-Economic Panel (SOEP).
  10. Thiel, Hendrik & Thomsen, Stephan L., 2009. "Noncognitive skills in economics: Models, measurement, and empirical evidence," ZEW Discussion Papers 09-076, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  11. Lundberg, Shelly, 2013. "Educational Inequality and the Returns to Skills," IZA Discussion Papers 7595, Institute for the Study of Labor (IZA).
  12. Almås, Ingvild & Cappelen, Alexander W. & Salvanes, Kjell G. & Sørensen, Erik Ø. & Tungodden, Bertil, 2014. "Willingness to Compete: Family Matters," Discussion Paper Series in Economics 3/2014, Department of Economics, Norwegian School of Economics.

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