The Economics And Psychology Of Personality Traits

This paper explores the interface between personality psychology and economics. The authors examine the predictive power of personality and the stability of personality traits over the life cycle. They develop simple analytical frameworks for interpreting the evidence in personality psychology and suggest promising avenues for future research. There is ample evidence from economics and psychology that cognitive ability is a powerful predictor of economic and social outcomes. It is intuitively obvious that cognition is essential in processing information, learning, and in decision making. It is also intuitively obvious that other traits besides raw problem-solving ability matter for success in life. The effects of personality traits, motivation, health, strength, and beauty on socioeconomic outcomes have recently been studied by economists.