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

Christopher J. Boyce and Alex M. Wood

Journal of Economic Behavior & Organization, 2011, vol. 78, issue 1, 183-191

Abstract: 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.

Keywords: Life satisfaction; Personality; GSOEP; Marginal utility of income (search for similar items in EconPapers)
JEL-codes: D12 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (73)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268111000187
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:78:y:2011:i:1:p:183-191

DOI: 10.1016/j.jebo.2011.01.004

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).