Although both economists and psychologists seek to identify determinants of heterogeneity in behavior, they use different concepts to capture them. In this review we first analyze the extent to which economic preferences and psychological concepts of personality - such as the Big Five and locus of control - are related. We analyze data from incentivized laboratory experiments and representative samples and find only low degrees of association between economic preferences and personality. We then regress life outcomes - such as labor market success, health status and life satisfaction - simultaneously on preference and personality measures. The analysis reveals that the two concepts are rather complementary when it comes to explaining heterogeneity in important life outcomes and behavior.
Publication Type
Article
Journal
Annual Review of Economics
Volume
4
Pages
453-478
JEL Codes
C91: Design of Experiments: Laboratory; Individual
D01: Microeconomic Behavior: Underlying Principles
D80: Information, Knowledge, and Uncertainty: General
D90: Intertemporal Choice and Growth: General
I00: Health, Education, and Welfare: General
J30: Wages, Compensation, and Labor Costs: General
J62: Job, Occupational, and Intergenerational Mobility; Promotion