Personality Psychology and Economics

By Mathilde Almlund, Angela L. Duckworth, James J. Heckman, Tim Kautz. Social Science Research Network, 2011

1,585 citations recorded by the source corpus.

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.

Subfields: Clinical Psychology, Experimental and Cognitive Psychology, General Decision Sciences

View Paper: https://www.semanticscholar.org/paper/951c951b4b117953ae0086666aea1eda7eb616cf

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Citations in the corpus

Early Social-Emotional Functioning and Public Health: The Relationship Between Kindergarten Social Competence and Future Wellness. (2015, background): “priate targets for prevention or intervention efforts.(12) Of course, the degree to which this”
The Relationship between Economic Preferences and Psychological Personality Measures (2012, background): “Almlund et al. (2011) enrich theory by incorporating personality traits in a standard economic framework of production, choice, and information.”
Cognitive skills, non-cognitive skills, and family background: evidence from sibling correlations (2016, neutral): “(2006) and Heineck and Anger (2010). An extensive overview can be found in Almlund et al.”
Do The Effects of Social Nudges Persist? Theory and Evidence from 38 Natural Field Experiments (2017, positive): “Recent research suggests that one particularly promising dimension is to focus investments on programs that target habitual behavior at early ages (see, e.g., Almlund et al., 2011).”
Linking Teacher Quality, Student Attendance, and Student Achievement (2016, neutral): “It is generally believed that instruction can improve character skills and there is a long history of using observed behaviors as proxies for character skills (Almlund et al. 2011; Heckman and Kautz 2013).”
The Personnel Economics of the State (2015, background): “There is a rich and growing literature in psychology and economics that suggest that personality traits including intrinsic motivation can be measured (see, for example, Almlund et al. 2011). 10 In the public administration literature, recent meta-studies suggest that public-service motivation is po”
Investing in Preschool Programs. (2013, background): “Although these traits have traditionally been viewed as relatively stable across the lifespan, some evidence indicates that they can change in response to life experiences and interventions (for example, Roberts, Walton, and Viechtbauer 2006; Almlund et al. 2011).”
Risk aversion relates to cognitive ability: Preferences or Noise? (2016, methodology): “Almlund et al. (2011) report that in the data of Dohmen et al. (2010) agreeableness and openness are related to risk preferences.”
Hard evidence on soft skills (2012, methodology): “…that depend on a single trait or ability gives rise to a fundamental identification problem that is typically ignored in empirical research investigating how psychological traits affect outcomes.31 28 See Borghans et al. (2008a) and Almlund et al. (2011) for a comparison of these taxonomies.”
Personality, IQ, and Lifetime Earnings (2018, background): “⇒ influence productivity indirectly (Almlund et al., 2011; Borghans et al., 2008).”
Promise and Paradox (2016, background): “150 for cognitive ability and demographics (Almlund et al., 2011; Duckworth & Carlson, 2013; Poropat, 2009).”
Measurement Matters: Assessing Personal Qualities Other Than Cognitive Ability for Educational Purposes (2015, background): “…that measures of personal qualities have been shown in basic research studies to be predictive of consequential life outcomes months, years, or decades later (Almlund et al., 2011; Borghans et al., 2008; Farrington et al., 2012; Moffitt et al., 2011; Naemi et al., 2012; B. Roberts et al., 2007).”
Teacher Quality and Learning Outcomes in Kindergarten (2016, background): “The Big Five is a widely accepted taxonomy of personality traits (Almlund et al. 2011; Costa and McCrae 1992; Goldsmith et al. 1987).”