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This paper explores the interface between personality psychology and economics. We examine the predictive power of personality and the stability of personality traits over the life cycle. We develop simple analytical frameworks for interpreting the evidence in personality psychology and suggest promising avenues for future research.
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... argue that the Big Five may be thought of as the longitude and latitude of personality, by which all more narrowly defined traits (often called "facets") may be categorized (Costa and McCrae, 1992a). Table 1 (1987) and Tellegen (1985) offer different three-factor models. Figure 2 shows the commonalities across competing taxonomies and also areas of divergence. ...
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... omnibus measures of personality include scales closely related to preference for leisure or, more frequently, the obverse trait of preference for work. The widely used Big Five (or NEO-PI-R, Costa and McCrae 1992b), whose components and facets are summarized in Table 1, includes an Achievement Striving subscale of Conscientiousness, which describes ambition, the capacity for hard work, and an inclination toward purposeful behavior. Jackson's Personality Research Form (1974) includes an achievement scale measuring the aspiration to accomplish difficult tasks and to put forth effort to attain excellence, as well as an endurance scale, measuring willingness to work long hours and perseverance in the face of difficulty, and a play scale, measuring the inclination to participate in games, sports, and social activities "just for fun." ...
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... is tempting to relate the personality traits in Table 1 to conventional economic preference parameters. This task is complicated by the fact that Table 1 omits cognition. ...
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... is tempting to relate the personality traits in Table 1 to conventional economic preference parameters. This task is complicated by the fact that Table 1 omits cognition. We previously cited evidence relating IQ to risk preference and time preference. ...
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... Table 1, "warmth" (a facet under extraversion) may be a productive trait in some settings, but it may be unproductive in certain settings (for example, an assembly line, on the battlefield or in a seminar). Fantasy (under Openness) can be counterproductive in routine tasks but very productive in creative work, providing that the person is also self-disciplined and open to criticism. ...
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... it possible that conventional economic preference parameters fully explain all of the personality traits uncovered by psychologists? It seems implausible that conventional leisure preference, risk aversion, and time preference parameters explain all of the traits identified in Table 1. For one thing, it is likely that these parameters are produced both by cognition and personality as we have previously noted. ...
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... economic models do not explain the origin of motives (goals). Most of the traits in Table 1 (for example, hostility, warmth, anxiety, trust) are less easily explained by standard economic preferences. ...
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... s is future consumption in state s, which occurs with P s . Under a certain interest rate r, the standard expected utility theory postulates that agents maximize for a three-possible-outcome-second-period-model, However, keeping probabilities implicit, the following non-expected model of utility maximization 1 1 1 1 3 2 2 2 1 2 3 1 2 3 ( , , , ) [ log( 111 See Epstein and LeBreton (1993), Gilboa and Schmeidler (1993), Siniscalchi (2006), and ...
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... Grit's narrower focus on goal pursuit and perseverance distinguishes it from conscientiousness, though empirical studies reveal moderate to high correlations between the two (Credé et al., 2017). 2 There is also a growing body of literature attempting to connect personality traits to measures of economic preferences. Borghans et al. (2008) provide a foundational review, emphasizing the importance of integrating personality traits into economic models to understand behaviors such as risk aversion, time preference, and social preferences. Jagelka (2024) extends this work by demonstrating a stronger link between individual abilities and preferences than previously established, using factor analysis to map these relationships empirically. ...
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... Yet, the belief that personality traits are highly stable once people reach adulthood persists in psychological science and beyond (Haslam et al., 2007;Quoidbach et al., 2013). For example, in economics, personality traits are typically viewed as fixed factors and conceptualized as static predictors of outcomes versus changeable qualities (Borghans et al., 2008). Similarly, people tend to report that qualities like their well-being will change in the future (H. ...
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