Personality-Augmented MPC: Linking Survey and Transaction Data to Explain MPC Heterogeneity by Big Five Personality Traits

67 Pages Posted: 22 Apr 2022 Last revised: 27 Apr 2022

See all articles by Fabian Nemeczek

Fabian Nemeczek

Goethe University Frankfurt

Jan Wedigo Radermacher

Leibniz Institute for Financial Research SAFE

Date Written: April 15, 2022

Abstract

We investigate the link between Big Five personality traits and the marginal propensity to consume (MPC) for users of a German financial account aggregator app. We use 1,700 survey responses and transaction data of 56,000 app users to assess whether Big Five personality traits help explain MPC heterogeneity. We find that extraversion corresponds to an increase in consumption whereas agreeableness and neuroticism correspond to a decrease in consumption. We test this with trust and risk preferences and find that risk indicates more explanatory power in consumption response than the Big Five. Our findings help policy makers target individuals more efficiently.

Keywords: Marginal Propensity to Consume, Big Five Personality, Survey Data, Transaction Data

Suggested Citation

Nemeczek, Fabian and Radermacher, Jan Wedigo, Personality-Augmented MPC: Linking Survey and Transaction Data to Explain MPC Heterogeneity by Big Five Personality Traits (April 15, 2022). SAFE Working Paper No. 348, 2022, Available at SSRN: https://ssrn.com/abstract=4089657 or http://dx.doi.org/10.2139/ssrn.4089657

Fabian Nemeczek (Contact Author)

Goethe University Frankfurt ( email )

Department of Finance
Theodor-W.-Adorno-Platz 3
Frankfurt, Hesse 60629
Germany

Jan Wedigo Radermacher

Leibniz Institute for Financial Research SAFE ( email )

House of Finance
Theodor-W.-Adorno-Platz 3
Frankfurt, 60323
Germany

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