TY - JOUR
T1 - Personality and the marginal utility of income
T2 - personality interacts with increases in household income to determine life satisfaction
AU - Boyce, Christopher J.
AU - Wood, Alex M.
PY - 2011/4
Y1 - 2011/4
N2 - Economics implicitly assumes that the marginal utility of income is independent of an individual's personality. We show that this is wrong. This is the first demonstration that there are strong personality-income interactions. In an analysis of 13,615 individuals over 4-years we show that individuals who have high levels of conscientiousness obtain more satisfaction to their lives from increases to their household income. There are strong gender differences and women that are open-to-experiences, introverted or neurotic get lower satisfaction from household income increases. Our findings have important implications for the use of financial incentives to influence behavior. In the future, public policy may benefit from being personality-specific.
AB - Economics implicitly assumes that the marginal utility of income is independent of an individual's personality. We show that this is wrong. This is the first demonstration that there are strong personality-income interactions. In an analysis of 13,615 individuals over 4-years we show that individuals who have high levels of conscientiousness obtain more satisfaction to their lives from increases to their household income. There are strong gender differences and women that are open-to-experiences, introverted or neurotic get lower satisfaction from household income increases. Our findings have important implications for the use of financial incentives to influence behavior. In the future, public policy may benefit from being personality-specific.
KW - GSOEP
KW - Life satisfaction
KW - Marginal utility of income
KW - Personality
UR - http://www.scopus.com/inward/record.url?scp=79954632045&partnerID=8YFLogxK
U2 - 10.1016/j.jebo.2011.01.004
DO - 10.1016/j.jebo.2011.01.004
M3 - Article
AN - SCOPUS:79954632045
VL - 78
SP - 183
EP - 191
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
SN - 0167-2681
IS - 1-2
ER -