Personality, Income, and Compensatory Consumption: Low-Income Extraverts Spend More on Status

Landis, Blaine; Gladstone, Joe

doi:10.1177/0956797617714811

Cited by 38 publications

(29 citation statements)

References 10 publications

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“…Households can express their status through discretionary expenditures (i.e., "keeping up with the Joneses"), decreasing the resources available to save for the future. Indeed, the stronger relationship between savings and extraversion in the striving group is consistent with recent research using customer bank account data which shows that low-income extraverts spend a greater proportion of their money on high-status goods compared to other groups (Landis and Gladstone, 2017). Alternatively, Nyhus and Webley (2001) suggest that extraverts' disposition towards spending time with others could explain this relationship.…”

Section: How Psychological Characteristics Impact Household Savings Bsupporting

confidence: 86%

Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity

Gerhard

Gladstone

Hoffmann

2018

Journal of Economic Behavior & Organization

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We employ a finite mixture model with maximum likelihood (ML) estimation to analyze latent heterogeneity in the relationship between psychological characteristics and household savings behavior. In a one-step ML estimation approach, we estimate a class membership model and a behavioral model of the classes jointly. Adopting this approach enables us to simultaneously assess how socio-demographic characteristics affect class membership probabilities and estimate class-specific regression coefficients, to test whether psychological characteristics predict savings behavior differently across latent classes. We apply this approach to a representative sample of UK households (n = 3,382) and identify two different latent classes: striving versus established households. We find that the relationship between psychological characteristics and savings behavior differs across these two classes, demonstrating the importance of accounting for latent heterogeneity when studying the drivers of savings behavior. Our results have implications for policymakers attempting to improve household savings behavior.

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Section: How Psychological Characteristics Impact Household Savings Bsupporting

confidence: 86%

Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity

Gerhard

Gladstone

Hoffmann

2018

Journal of Economic Behavior & Organization

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“…This pursuit of higher status and aspiration for social rewards are further supported by the finding that extraversion is associated with valuing and aspiring for economic goals, such as high-status careers, prestigious occupations, interpersonal influence, and high standards of living (Roberts & Robins, 2000). Such status goals are also apparent in the typical purchases of extraverts: based on bank account data, extraversion is associated with high-status purchases, but not with social spending (Landis & Gladstone, 2017).…”

Section: Does Extraversion Predict Popularity?mentioning

confidence: 89%

When and why is “extraversion” associated with social popularity?

Ilmarinen¹

2018

Preprint

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Examinations of the relationship between individuals’ personal characteristics and the social positions that individuals receive in everyday peer networks have often found an association between extraversion and popularity. This thesis assesses the conditions (when) and mechanisms (why) of this association.Four research questions focus on when the link between extraversion and popularity is present. The study examines whether extraversion is already associated with popularity among seven- to eight-year-olds (Study I), if extraversion is associated with popularity in a less talkative and more stereotypically introverted culture as well (i.e. in Finland; Studies I and II), whether the association is more reflective of the popularity of extraverts or the unpopularity of introverts (Studies II and III), and if the size of the surrounding social ecology is an important precondition of this association (Study III). In addition, the study considers two why research questions. Studies II and III examine if dyadic combinations of extraversion could serve as popularity particles that would explain why extraverts are ultimately more popular in the group, whereas Study I evaluates the mediating role of oral fluency between extraversion and popularity among children.The association between extraversion and popularity is found to be highly generalizable, as it is present among young and adult Finns as well as in social networks of varying sizes. In addition, the association is linear and unilateral: introverts are unpopular as much as extraverts are popular, and dyadic combinations of extraversion are not significant in explaining this phenomenon. Finally, the higher oral fluency of extraverts partially explains their popularity in middle childhood.The discussion focuses on the causality of this association and engages with the ontological status of trait extraversion throughout the thesis. The research also highlights the role of popularity and social networks in accounting for the coalescence of extraversion.

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“…Indeed, more visible wealth disparities are associated with more detrimental downstream consequences 51,52 . As a result, at higher levels of economic inequality, individuals may feel greater spending pressure, which may be particularly difficult to bear for those with lower incomes 53 . We encourage future research to further explore these complementary explanations underlying the detrimental effect of higher economic inequality for low-income individuals, and in particular, how differences in the visibility of economic inequality may influence its perception and associated downstream consequences.…”

Section: Discussionmentioning

confidence: 99%

Higher Economic Inequality Intensifies the Poor’s Financial Hardship by Fraying the Community Buffer

Jachimowicz¹,

Lukas²,

Smerdon³

et al. 2019

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The current research investigates whether higher economic inequality disproportionately intensifies the financial hardship of low-income individuals. We propose that higher economic inequality increases financial hardship for low-income individuals by reducing their ability to rely on their community as a buffer against financial difficulties. This may occur—in part—because a frayed community buffer reduces low-income individuals’ propensity to seek informal financial support from others. We provide empirical support across eight studies (N = 1,029,900) from the U.S., Australia, and rural Uganda, through correlational and experimental data, and an instrumental variable analysis. On average across our studies, a one SD increase in economic inequality is associated with an increase of financial hardship amongst low-income individuals of .10 SDs. We discuss the implications of these results for policy aimed to help the poor buffer against the adverse effects higher economic inequality imposes on them.

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Personality, Income, and Compensatory Consumption: Low-Income Extraverts Spend More on Status

Cited by 38 publications

References 10 publications

Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity

Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity

When and why is “extraversion” associated with social popularity?

Higher Economic Inequality Intensifies the Poor’s Financial Hardship by Fraying the Community Buffer

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