Personality and Response to the Financial Crisis

20 Pages Posted: 17 Feb 2012

See all articles by Angela Duckworth

Angela Duckworth

University of Pennsylvania - Department of Psychology

David Weir

University of Michigan at Ann Arbor - Institute for Social Research (ISR)

Date Written: December 1, 2011

Abstract

In a previous study, we found the family of personality traits known as conscientiousness to be associated in cross-sectional analyses with both lifetime earnings and wealth. In this study, we used data from an Internet survey of HRS respondents in the second quarter of 2009 to test whether conscientiousness and other Big Five factors prospectively predicted responses to the financial crisis of 2008/09. In addition, to improve the targeting and design of behavioral interventions for “at-risk” individuals, we examined two specific facets of conscientiousness (i.e., self-control and perseverance) that may be more highly related to these economic outcomes than other facets. Finally, we used data from the Consumption and Activities Mail Survey (CAMS) to examine whether personality is related to the proportion of income saved vs. spent.

Missing data precluded sufficiently powerful prospective analyses of personality and responses to the financial crisis. Likewise, data on self-control and perseverance from the 2010 experimental module were not sufficient at the time of final reporting to come to definitive conclusions about how these facets relate to economic outcomes. We did find that conscientious adults save more and spend less of their incomes, whereas adults who are higher in openness to experience (e.g., adventurous, sophisticated) save less and spend more of their income. The robust associations between conscientiousness and economic outcomes suggests further investigation of interventions that improve conscientiousness as well as policies that specifically target less conscientious individuals (e.g., default choices for retirement savings).

Keywords: retirement, savings, financial crisis, personality

Suggested Citation

Duckworth, Angela and Weir, David, Personality and Response to the Financial Crisis (December 1, 2011). Michigan Retirement Research Center Research Paper No. WP 2011-260, Available at SSRN: https://ssrn.com/abstract=2006595 or http://dx.doi.org/10.2139/ssrn.2006595

Angela Duckworth (Contact Author)

University of Pennsylvania - Department of Psychology ( email )

3815 Walnut Street
Philadelphia, PA 19104-6196
United States

David Weir

University of Michigan at Ann Arbor - Institute for Social Research (ISR) ( email )

Ann Arbor, MI 48106-1248
United States

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