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

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References

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  1. 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, University of Munich, Department of Economics 20049, University of Munich, Department of Economics.
  2. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2010. "Are risk aversion and impatience related to cognitive ability?," Munich Reprints in Economics, University of Munich, Department of Economics 20063, University of Munich, Department of Economics.
  3. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," NBER Working Papers 13810, National Bureau of Economic Research, Inc.
  4. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, Elsevier, vol. 54(2), pages 293-315, February.
  5. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2008. "Representative trust and reciprocity: Prevalence and determenants," Munich Reprints in Economics, University of Munich, Department of Economics 20058, University of Munich, Department of Economics.
  6. 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.
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  8. Almlund, Mathilde & Duckworth, Angela Lee & Heckman, James J. & Kautz, Tim, 2011. "Personality Psychology and Economics," IZA Discussion Papers 5500, Institute for the Study of Labor (IZA).
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  11. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2009. "Homo Reciprocans: Survey Evidence on Behavioural Outcomes," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 119(536), pages 592-612, 03.
  12. Heckman, James J., 2011. "Integrating Personality Psychology into Economics," IZA Discussion Papers 5950, Institute for the Study of Labor (IZA).
  13. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  14. Armin Falk & Ernst Fehr & Urs Fischbacher, 2005. "Driving Forces Behind Informal Sanctions," Econometrica, Econometric Society, Econometric Society, vol. 73(6), pages 2017-2030, November.
  15. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
  16. Eckel, Catherine C. & Grossman, Philip J., 1996. "Altruism in Anonymous Dictator Games," Games and Economic Behavior, Elsevier, Elsevier, vol. 16(2), pages 181-191, October.
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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, Philipps University Marburg, Department of Geography.
  2. 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).
  3. Deckers, Thomas & Falk, Armin & Schildberg-Hörisch, Hannah, 2013. "Nominal or Real? The Impact of Regional Price Levels on Satisfaction with Life," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 450, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. Thiel, Hendrik & Thomsen, Stephan L., 2013. "Noncognitive skills in economics: Models, measurement, and empirical evidence," Research in Economics, Elsevier, Elsevier, vol. 67(2), pages 189-214.
  5. Almås, Ingvild & Cappelen, Alexander W. & Salvanes, Kjell G. & Sørensen, Erik Ø. & Tungodden, Bertil, 2014. "Willingness to Compete: Family Matters," Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics 3/2014, Department of Economics, Norwegian School of Economics.
  6. LEE SunYoun & OHTAKE Fumio, 2014. "The Effects of Personality Traits and Behavioral Characteristics on Schooling, Earnings, and Career Promotion," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 14023, Research Institute of Economy, Trade and Industry (RIETI).
  7. Lundberg, Shelly, 2010. "Personality and Marital Surplus," IZA Discussion Papers 4945, Institute for the Study of Labor (IZA).
  8. James Heckman & Tim Kautz, 2013. "Fostering and Measuring Skills: Interventions That Improve Character and Cognition," Working Papers, Human Capital and Economic Opportunity Working Group 2013-019, Human Capital and Economic Opportunity Working Group.
  9. Krause, Annabelle, 2012. "Don't Worry, Be Happy? Happiness and Reemployment," IZA Discussion Papers 7107, Institute for the Study of Labor (IZA).
  10. Shelly Lundberg, 2013. "Educational Inequality and the Returns to Skills," Working Papers, Human Capital and Economic Opportunity Working Group 2013-017, Human Capital and Economic Opportunity Working Group.
  11. Lundberg, Shelly, 2014. "Skill Disparities and Unequal Family Outcomes," IZA Discussion Papers 8346, Institute for the Study of Labor (IZA).
  12. Krause, Annabelle, 2013. "Don’t worry, be happy? Happiness and reemployment," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 96(C), pages 1-20.
  13. Dohmen, Thomas, 2014. "Behavioural Labour Economics: Advances and Future Directions," IZA Discussion Papers 8263, Institute for the Study of Labor (IZA).
  14. 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).

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