Personality Psychology and Economics

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACT Personality Psychology and Economics *This paper explores the power of personality traits both as predictors and as causes of academic and economic success, health, and criminal activity. Measured personality is interpreted as a construct derived from an economic model of preferences, constraints, and information. Evidence is reviewed about the "situational specificity" of personality traits and preferences. An extreme version of the situationist view claims that there are no stable personality traits or preference parameters that persons carry across different situations. Those who hold this view claim that personality psychology has little relevance for economics. The biological and evolutionary origins of personality traits are explored. Personality measurement systems and relationships among the measures used by psychologists are examined. The predictive power of personality measures is compared with the predictive power of measures of cognition captured by IQ and achievement tests. For many outcomes, personality measures are just as predictive as cognitive measures, even after controlling for family background and cognition. Moreover, standard measures of cognition are heavily influenced by personality traits and incentives. Measured personality traits are positively correlated over the life cycle. However, they are not fixed and can be altered by experience and investment. Intervention studies, along with studies in biology and neuroscience, establish a causal basis for the observed effect of personality traits on economic and social outcomes. Personality traits are more malleable over the life cycle compared to cognition, which becomes highly rank stable around age 10. Interventions that change personality are promising avenues for addressing poverty and disadvantage.JEL Classification: I2, J24

The importance of early conscientiousness for socio-economic outcomes: evidence from the British Cohort Study

“…They summarise and review the literature from personality psychology. Almlund et al (2011) present an overview of evidence from other academic fields on the importance of conscientiousness. 3 Moffitt et al (2011) present evidence that conscientiousness, which they define as part of the umbrella of selfcontrol, predicts a range of socio-economic outcomes, such as physical health, substance dependence, personal finances and criminal offending outcomes.…”

“…The outcomes are adult wages, saving behaviour, indicators of 1 See e.g., Cunha et al (2006), Knudsen et al (2006), Heckman (2007), Borghans et al (2008a), Roberts (2009), Dohmen et al (2010), Almlund et al (2011), Lebel and Beaulieu (2011) and Moffitt et al (2011). 2 See and Jackson et al (2009) for meta-analyses with conscientiousness as a predictor for outcomes.…”

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