IDEAS home Printed from https://ideas.repec.org/p/iae/iaewps/wp2010n14.html
   My bibliography  Save this paper

Personality, Well-being and Heterogeneous Valuations of Income and Work

Author

Listed:
  • Stefanie Schurer

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Jongsay Yong

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

Using Australian longitudinal data and a random coefficient approach, this paper investigates whether personality traits explain the heterogeneity in these valuations. We find that differences in subjective well-being are driven by Emotional Stability. Women's valuations of income depend on their score of Openness to Experience and men significantly differ in their valuations of work across the spectrum of Emotional Stability and Conscientiousness. Our study directly tests predictions of Self-Determination Theory and contributes to the debate on the assumption of homogeneous agents in economic theory.

Suggested Citation

  • Stefanie Schurer & Jongsay Yong, 2010. "Personality, Well-being and Heterogeneous Valuations of Income and Work," Melbourne Institute Working Paper Series wp2010n14, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2010n14
    as

    Download full text from publisher

    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2010n14.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eric A. Hanushek & EJohn F. Kain & Steven G. Rivkin, 2004. "Why Public Schools Lose Teachers," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    2. Oswald, Andrew J., 2008. "On the curvature of the reporting function from objective reality to subjective feelings," Economics Letters, Elsevier, vol. 100(3), pages 369-372, September.
    3. Richard Blundell & Martin Browning & Costas Meghir, 1994. "Consumer Demand and the Life-Cycle Allocation of Household Expenditures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(1), pages 57-80.
    4. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    5. Mark Wooden & Diana Warren & Robert Drago, 2009. "Working Time Mismatch and Subjective Well‐being," British Journal of Industrial Relations, London School of Economics, vol. 47(1), pages 147-179, March.
    6. Andrew M. Jones & Stefanie Schurer, 2011. "How does heterogeneity shape the socioeconomic gradient in health satisfaction?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(4), pages 549-579, June.
    7. Robin Boadway & Maurice Marchand & Pierre Pestieau & María Del Mar Racionero, 2002. "Optimal Redistribution with Heterogeneous Preferences for Leisure," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(4), pages 475-498, October.
    8. Alan B. Krueger & David Schkade, 2008. "Sorting in the Labor Market: Do Gregarious Workers Flock to Interactive Jobs?," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    9. Krueger, Alan B. & Schkade, David A., 2008. "The reliability of subjective well-being measures," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1833-1845, August.
    10. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, vol. 118(529), pages 222-243, June.
    11. Nattavudh Powdthavee, 2010. "How much does money really matter? Estimating the causal effects of income on happiness," Empirical Economics, Springer, vol. 39(1), pages 77-92, August.
    12. Layard, R. & Mayraz, G. & Nickell, S., 2008. "The marginal utility of income," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1846-1857, August.
    13. Headey, Bruce & Muffels, Ruud & Wooden, Mark, 2004. "Money Doesn’t Buy Happiness… Or Does It? A Reconsideration Based on the Combined Effects of Wealth, Income and Consumption," IZA Discussion Papers 1218, Institute of Labor Economics (IZA).
    14. Paul Frijters & Michael A. Shields & Stephen Wheatley Price, 2004. "To Teach or not to Teach? Panel Data Evidence on the Quitting Decision," Department of Economics - Working Papers Series 916, The University of Melbourne.
    15. Alison L. Booth & Jan C. Van Ours, 2009. "Hours of Work and Gender Identity: Does Part‐time Work Make the Family Happier?," Economica, London School of Economics and Political Science, vol. 76(301), pages 176-196, February.
    16. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, vol. 94(3), pages 730-740, June.
    17. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    18. Verme, Paolo, 2009. "Happiness, freedom and control," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 146-161, August.
    19. Phelps, Charlotte D., 2001. "A clue to the paradox of happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 293-300, July.
    20. Lex Borghans & Bas ter Weel & Bruce A. Weinberg, 2008. "Interpersonal Styles and Labor Market Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    21. Boadway, Robin & Keen, Michael, 2000. "Redistribution," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 12, pages 677-789, Elsevier.
    22. László Mátyás & Patrick Sevestre (ed.), 2008. "The Econometrics of Panel Data," Advanced Studies in Theoretical and Applied Econometrics, Springer, number 978-3-540-75892-1.
    23. Marco Caliendo & Frank Fossen & Alexander Kritikos, 2009. "Risk attitudes of nascent entrepreneurs–new evidence from an experimentally validated survey," Small Business Economics, Springer, vol. 32(2), pages 153-167, February.
    24. Patrick Sevestre & Laszlo Matyas, 2008. "The Econometrics of Panel Data," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00279977, HAL.
    25. Pouwels, Babette & Siegers, Jacques & Vlasblom, Jan Dirk, 2008. "Income, working hours, and happiness," Economics Letters, Elsevier, vol. 99(1), pages 72-74, April.
    26. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    27. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    28. repec:feb:framed:0019 is not listed on IDEAS
    29. Michael A. Shields, 2004. "Addressing nurse shortages: what can policy makers learn from the econometric evidence on nurse labour supply?," Economic Journal, Royal Economic Society, vol. 114(499), pages 464-498, November.
    30. Sophia Rabe-Hesketh & Anders Skrondal, 2012. "Multilevel and Longitudinal Modeling Using Stata, 3rd Edition," Stata Press books, StataCorp LP, edition 3, number mimus2.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ambrey, Christopher L. & Fleming, Christopher M., 2011. "The influence of the natural environment and climate on life satisfaction in Australia," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100548, Australian Agricultural and Resource Economics Society.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schurer, S. & Yong, J., 2012. "Personality, well-being and the marginal utility of income: What can we learn from random coefficient models?," Health, Econometrics and Data Group (HEDG) Working Papers 12/01, HEDG, c/o Department of Economics, University of York.
    2. Schurer, Stefanie & Yong, Jongsay, 2012. "Personality, well-being and the marginal utility of income: What can we learn from random coefficient models?," Working Paper Series 18617, Victoria University of Wellington, School of Economics and Finance.
    3. Martin Binder & Felix Ward, 2011. "The Structure of Happiness: A Vector Autoregressive Approach," Papers on Economics and Evolution 2011-08, Philipps University Marburg, Department of Geography.
    4. Boyce, Christopher J. & Wood, Alex M., 2011. "Personality and the marginal utility of income: Personality interacts with increases in household income to determine life satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1), pages 183-191.
    5. Boyce, Christopher J. & Wood, Alex M., 2011. "Personality and the marginal utility of income: Personality interacts with increases in household income to determine life satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 183-191, April.
    6. Kaiser, Caspar, 2020. "People do not adapt. New analyses of the dynamic effects of own and reference income on life satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 494-513.
    7. Deckers Thomas & Falk Armin & Schildberg-Hörisch Hannah, 2016. "Nominal or Real? The Impact of Regional Price Levels on Satisfaction with Life," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(3), pages 1337-1358, September.
    8. Binder, Martin & Coad, Alex, 2013. "“I'm afraid I have bad news for you…” Estimating the impact of different health impairments on subjective well-being," Social Science & Medicine, Elsevier, vol. 87(C), pages 155-167.
    9. Ambrey, Christopher L. & Fleming, Christopher M., 2011. "Valuing scenic amenity using life satisfaction data," Ecological Economics, Elsevier, vol. 72(C), pages 106-115.
    10. Christopher Ambrey & Christopher Fleming, 2014. "Public Greenspace and Life Satisfaction in Urban Australia," Urban Studies, Urban Studies Journal Limited, vol. 51(6), pages 1290-1321, May.
    11. Nguyen, Ha & Duncan, Alan, 2015. "Macroeconomic fluctuations in home countries and immigrants’ well-being: New evidence from Down Under," MPRA Paper 69593, University Library of Munich, Germany, revised Feb 2016.
    12. Robert Rudolf, 2014. "Work Shorter, Be Happier? Longitudinal Evidence from the Korean Five-Day Working Policy," Journal of Happiness Studies, Springer, vol. 15(5), pages 1139-1163, October.
    13. Kaiser, Caspar, 2018. "People do not adapt to income changes: A re-evaluation of the dynamic effects of (reference) income on life satisfaction with GSOEP and UKHLS data," INET Oxford Working Papers 2018-07, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    14. Gibbons, Stephen & Silva, Olmo, 2011. "School quality, child wellbeing and parents' satisfaction," Economics of Education Review, Elsevier, vol. 30(2), pages 312-331, April.
    15. Christopher L Ambrey & Christopher M Fleming & Matthew Manning, 2013. "The life satisfaction approach to estimating the cost of crime: An individual's willingness-to-pay for crime reduction," Discussion Papers in Economics economics:201301, Griffith University, Department of Accounting, Finance and Economics.
    16. Kaiser, Caspar, 2022. "Using memories to assess the intrapersonal comparability of wellbeing reports," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 410-442.
    17. Martin Binder & Alex Coad, 2011. ""I'm afraid I have bad news for you . . ." Estimating the impact of different health impairments on subjective well-being," Papers on Economics and Evolution 2011-15, Philipps University Marburg, Department of Geography.
    18. Stutzer, Alois & Frey, Bruno S., 2012. "Recent Developments in the Economics of Happiness: A Selective Overview," IZA Discussion Papers 7078, Institute of Labor Economics (IZA).
    19. repec:zbw:rwirep:0297 is not listed on IDEAS
    20. Mark Wooden & Diana Warren & Robert Drago, 2009. "Working Time Mismatch and Subjective Well‐being," British Journal of Industrial Relations, London School of Economics, vol. 47(1), pages 147-179, March.
    21. Antje Mertens & Miriam Beblo, 2016. "Self-Reported Satisfaction and the Economic Crisis of 2007–2010: Or How People in the UK and Germany Perceive a Severe Cyclical Downturn," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(2), pages 537-565, January.

    More about this item

    Keywords

    random coefficient model; personality traits; heterogeneity; subjective wellbeing; income and work; preferences;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D00 - Microeconomics - - General - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2010n14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sheri Carnegie (email available below). General contact details of provider: https://edirc.repec.org/data/mimelau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.