Personality and the marginal utility of income: Personality interacts with increases in household income to determine life satisfaction

Boyce, Christopher J.; Wood, Alex M.

doi:10.1016/j.jebo.2011.01.004

Cited by 99 publications

(83 citation statements)

References 52 publications

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“…Our next step would be to identify whether this personality profiles also shape individuals' preferences regarding the income distribution or inequality in the region. Earlier findings in the literature show that some personality profiles are correlated with larger happiness reports (Boyce, 2010) and that personality also shapes the marginal utility of income (Boyce and Wood, 2011). Our results are consistent with these findings.…”

Section: Discussionsupporting

confidence: 93%

“…Boyce and Wood (2011) also found differences on the marginal utility of income depending on the individual personality, although our results are not identical to theirs. The dissimilarities may be driven by two main differences between the two papers: (i) we use a larger set of personality measures, and (ii) Boyce and Wood (2011) do not estimate separate regressions for each subsample but chose to estimate the model with interactions. To do that, they assume that the effect of each personality measure on life satisfaction is already captured by the individual fixed effect (see section 4.2).…”

Section: Results: the Effect Of Rank And The Role Of The Non-cognitivmentioning

confidence: 99%

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Income Comparisons and Non-Cognitive Skills

Budría¹,

Ferrer-i-Carbonell

2012

SSRN Journal

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People gain utility from occupying a higher ranked position in the income distribution of the reference group. This paper investigates whether these gains depend on an individual's set of non-cognitive skills. Using the 2000-2008 waves of the German Socioeconomic Panel dataset (SOEP), a subjective question on Life Satisfaction, and three different sets of non-cognitive skills indicators, we find significant and robust differences across skills groups. People who are more neurotic, extravert and have low external locus of control and low negative reciprocity are more sensitive to their individual position in the economic ladder. By contrast, the Life Satisfaction reaction to changes in economic status is significantly lower among individuals who score high (low) in negative (positive) reciprocity, and are at the bottom of the distribution of neuroticism, extraversion. The heterogeneity on the importance of income comparisons needs to be taken into account when, for example, introducing them into economic models, predicting individuals' behaviour, or making welfare judgments.

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Section: Discussionsupporting

confidence: 93%

Section: Results: the Effect Of Rank And The Role Of The Non-cognitivmentioning

confidence: 99%

Income Comparisons and Non-Cognitive Skills

Budría¹,

Ferrer-i-Carbonell

2012

SSRN Journal

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“…For example, unemployed individuals who are conscientious endure the largest decreases in life satisfaction following unemployment (Boyce, A. M. Wood, & Brown, 2010), and conscientiousness is related to enjoyment of one's own income which the unemployed lack (Ameriks et al, 2003;Boyce & A. M. Wood, 2011a). These findings may be interpreted as indicating that, in some ways, it is preferable to be less conscientious.…”

Section: Discussionmentioning

confidence: 99%

“…The SOEP is one of the primary socio-economic datasets with which hundred articles have been published (see http://www.diw.de/en/diw_02.c.221182.en/publications_with_soep_data.html). The authors have used portions of SOEP to answer different research questions in the following published research articles: Boyce, (2010), Boyce & Wood, (2011a), Boyce & Wood, (2011b) ;Boyce, Wood, & Brown, (2010).…”

Section: Participants and Proceduresmentioning

confidence: 99%

Personality change following unemployment.

Boyce

Wood

Daly

et al. 2015

Journal of Applied Psychology

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178

121

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Unemployment has a strongly negative influence on well-being, but it is unclear whether it also alters basic personality traits. Whether personality changes arise through natural maturation processes or contextual/environmental factors is still a matter of debate. Unemployment, a relatively unexpected and commonly occurring life event, may shed light on the relevance of context for personality change. We examined, using a latent change model, the influence of unemployment on the five-factor model of personality in a sample of 6,769 German adults, who completed personality measures at 2 time points 4 years apart. All participants were employed at the first time point, and a subset became unemployed over the course of the study. By the second time point, participants had either remained in employment, been unemployed from 1 to 4 years, or had experienced some unemployment but become reemployed. Compared with those who had remained in employment, unemployed men and women experienced significant patterns of change in their mean levels of agreeableness, conscientiousness, and openness, whereas reemployed individuals experienced limited change. The results indicate that unemployment has wider psychological implications than previously thought. In addition, the results are consistent with the view that personality changes as a function of contextual and environmental factors.

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“…Our approach and data do not allow us to control for the time-invariant unobserved individual effects (e.g., genetic predisposition, personality characteristics). These characteristics are found to be very important in explaining individuals' SWB (Boyce and Wood, 2011). In this robustness check, we follow the strategy developed in Akay et al (2012) to partially control for these latent characteristics.…”

mentioning

confidence: 99%

Remittances and relative concerns in rural China

Akay

Bargain

Giulietti³

et al. 2016

China Economic Review

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The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of well-being functions to simultaneously explore the relative concerns with respect to income and remittances. Our results show that although rural households experience substantial utility loss due to income comparisons, they gain utility by comparing their remittances with those received by their reference group. In other words, we find evidence of a "status-effect" with respect to income and of a "signal-effect" with respect to remittances. The magnitudes of these two opposite effects are very similar, implying that the utility reduction due to relative income is compensated by the utility gain due to relative remittances. This finding is robust to various specifications, controlling for the endogeneity of remittances and selective migration, as well as a measure of current migrants' net remittances calculated using counterfactual income and expenditures.

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Personality and the marginal utility of income: Personality interacts with increases in household income to determine life satisfaction

Cited by 99 publications

References 52 publications

Income Comparisons and Non-Cognitive Skills

Income Comparisons and Non-Cognitive Skills

Personality change following unemployment.

Remittances and relative concerns in rural China

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