Personality and economic choices

Citation

Boyce CJ, Czajkowski M & Hanley N (2019) Personality and economic choices. Journal of Environmental Economics and Management, 94, pp. 82-100. https://doi.org/10.1016/j.jeem.2018.12.004

Abstract
There is substantial variation in individual preferences for public goods, yet much of that variation remains poorly understood. However, simple measures of personality can help to explain economic values and choices in a systematic way. In this paper, we examine the effects of personality on individual economic choices over public environmental goods. Based on three datasets from three separate stated preference studies, we use a hybrid choice econometric framework to examine the effects of personality on preferences for the status quo, changes in environmental quality, and costs of investing in environmental improvements. We find effects that are consistent across all datasets. Personality, a stable feature of an individual's character that is simple to measure, enriches explanations of why the demand for environmental goods varies across people, provides an indication of how different people are likely to react to the introduction of environmental policies, and explains substantial differences in Willingness to Pay.

Keywords
Personality; Preference heterogeneity; Hybrid choice models; Stated preferences; Choice models

Journal
Journal of Environmental Economics and Management: Volume 94

People

Dr Christopher Boyce

Honorary Research Fellow, SMS Management and Support