The Relationship between Economic Preferences and Psychological Personality Measures

43 Pages Posted: 19 Apr 2012

See all articles by Anke Becker

Anke Becker

Harvard University

Thomas Deckers

University of Bonn

Thomas J. Dohmen

Institute for the Study of Labor (IZA); Maastricht University - Business Investment Research Center (BIRC)

Armin Falk

briq - Institute on Behavior & Inequality

Fabian Kosse

University of Bonn

Multiple version iconThere are 3 versions of this paper

Date Written: April 19, 2012

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.

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

JEL Classification: C910, D010, D800, D900, I000, J300, J620

Suggested Citation

Becker, Anke and Deckers, Thomas and Dohmen, Thomas and Falk, Armin and Kosse, Fabian, The Relationship between Economic Preferences and Psychological Personality Measures (April 19, 2012). CESifo Working Paper Series No. 3785. Available at SSRN: https://ssrn.com/abstract=2042458

Anke Becker

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Thomas Deckers

University of Bonn ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany

Thomas Dohmen

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Maastricht University - Business Investment Research Center (BIRC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-388 3832 (Phone)
+31-43-388 4856 (Fax)

Armin Falk (Contact Author)

briq - Institute on Behavior & Inequality

Schaumburg-Lippe-Straße 5-9
Bonn, 53113
Germany

HOME PAGE: http://www.briq-institute.org/

Fabian Kosse

University of Bonn ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany

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