TY - JOUR
T1 - Individual Differences in Loss Aversion
T2 - conscientiousness predicts how life satisfaction responds to losses versus gains in income
AU - Boyce, Christopher J.
AU - Wood, Alex M.
AU - Ferguson, Eamonn
N1 - Funding Information:
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The Economic and Social Research Council provided research support (ES/K00588X/1).
Publisher Copyright:
© 2016, 2016 by the Society for Personality and Social Psychology, Inc.
PY - 2016/3/9
Y1 - 2016/3/9
N2 - Loss aversion is considered a general pervasive bias occurring regardless of the context or the person making the decision. We hypothesized that conscientiousness would predict an aversion to losses in the financial domain. We index loss aversion by the relative impact of income losses and gains on life satisfaction. In a representative German sample (N = 105,558; replicated in a British sample, N = 33,848), with conscientiousness measured at baseline, those high on conscientiousness have the strongest reactions to income losses, suggesting a pronounced loss aversion effect, whereas for those moderately unconscientious, there is no loss aversion effect. Our research (a) provides the first evidence of personality moderation of any loss aversion phenomena, (b) supports contextual perspectives that both personality and situational factors need to be examined in combination, (c) shows that the small but robust relationship between income and life satisfaction is driven primarily by a subset of people experiencing highly impactful losses.
AB - Loss aversion is considered a general pervasive bias occurring regardless of the context or the person making the decision. We hypothesized that conscientiousness would predict an aversion to losses in the financial domain. We index loss aversion by the relative impact of income losses and gains on life satisfaction. In a representative German sample (N = 105,558; replicated in a British sample, N = 33,848), with conscientiousness measured at baseline, those high on conscientiousness have the strongest reactions to income losses, suggesting a pronounced loss aversion effect, whereas for those moderately unconscientious, there is no loss aversion effect. Our research (a) provides the first evidence of personality moderation of any loss aversion phenomena, (b) supports contextual perspectives that both personality and situational factors need to be examined in combination, (c) shows that the small but robust relationship between income and life satisfaction is driven primarily by a subset of people experiencing highly impactful losses.
KW - conscientiousness
KW - income
KW - life satisfaction
KW - loss aversion
KW - personality
KW - subjective well-being
UR - http://www.scopus.com/inward/record.url?scp=84961163557&partnerID=8YFLogxK
U2 - 10.1177/0146167216634060
DO - 10.1177/0146167216634060
M3 - Article
C2 - 26960673
AN - SCOPUS:84961163557
SN - 0146-1672
VL - 42
SP - 471
EP - 484
JO - Personality and Social Psychology Bulletin
JF - Personality and Social Psychology Bulletin
IS - 4
ER -