IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp16133.html
   My bibliography  Save this paper

The Economic Approach to Personality, Character and Virtue

Author

Listed:
  • Heckman, James J.

    (University of Chicago)

  • Galaty, Bridget

    (University of Chicago)

  • Tian, Haihan

    (University of Chicago)

Abstract

This chapter presents an economic approach to character and personality traits with an application to the study of virtue. Economists interpret psychological traits, including character traits and virtue, as strategies that shape responses to situations (actions) determined by underlying endowments, preferences and resources, as well as incentives to act in situations. Philosophers of virtue consider a more limited set of goals than economists but the same tools can be applied to the economics of virtue ethics. Character traits and personality are not considered immutable in either field. They are shaped by genetics, parents, peers, and schools, as well as life experiences. We develop economic models to interpret and give empirical content to virtue ethics and suggest what virtue ethics contributes to the study of economic models.

Suggested Citation

  • Heckman, James J. & Galaty, Bridget & Tian, Haihan, 2023. "The Economic Approach to Personality, Character and Virtue," IZA Discussion Papers 16133, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16133
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp16133.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Christopher Blattman & Julian C. Jamison & Margaret Sheridan, 2017. "Reducing Crime and Violence: Experimental Evidence from Cognitive Behavioral Therapy in Liberia," American Economic Review, American Economic Association, vol. 107(4), pages 1165-1206, April.
    2. Sonja C Kassenboehmer & Felix Leung & Stefanie Schurer, 2018. "University education and non-cognitive skill development," Oxford Economic Papers, Oxford University Press, vol. 70(2), pages 538-562.
    3. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
    4. James J. Heckman & John Eric Humphries & Gregory Veramendi, 2018. "Returns to Education: The Causal Effects of Education on Earnings, Health, and Smoking," Journal of Political Economy, University of Chicago Press, vol. 126(S1), pages 197-246.
    5. Benjamin Williams, 2020. "Identification of the linear factor model," Econometric Reviews, Taylor & Francis Journals, vol. 39(1), pages 92-109, January.
    6. Flávio Cunha & James Heckman, 2016. "Decomposing Trends in Inequality in Earnings into Forecastable and Uncertain Components," Journal of Labor Economics, University of Chicago Press, vol. 34(S2), pages 31-65.
    7. Flavio Cunha & Qinyou Hu & Yiming Xia & Naibao Zhao, 2023. "Reducing Bullying: Evidence from a Parental Involvement Program on Empathy Education," NBER Working Papers 30827, National Bureau of Economic Research, Inc.
    8. Bart H. H. Golsteyn & Arjan Non & Ulf Zölitz, 2021. "The Impact of Peer Personality on Academic Achievement," Journal of Political Economy, University of Chicago Press, vol. 129(4), pages 1052-1099.
    9. Falk, Armin & Abeler, Johannes & Kosse, Fabian, 2021. "Malleability of preferences for honesty," CEPR Discussion Papers 16164, C.E.P.R. Discussion Papers.
    10. Petra E. Todd & Weilong Zhang, 2020. "A dynamic model of personality, schooling, and occupational choice," Quantitative Economics, Econometric Society, vol. 11(1), pages 231-275, January.
    11. Jorge Luis García & James J. Heckman, 2023. "Parenting Promotes Social Mobility Within and Across Generations," Annual Review of Economics, Annual Reviews, vol. 15(1), pages 349-388, September.
    12. James J. Heckman & Stefano Mosso, 2014. "The Economics of Human Development and Social Mobility," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 689-733, August.
    13. Flavio Cunha & James J. Heckman & Susanne M. Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," Econometrica, Econometric Society, vol. 78(3), pages 883-931, May.
    14. Fletcher Jason M. & Schurer Stefanie, 2017. "Origins of Adulthood Personality: The Role of Adverse Childhood Experiences," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(2), pages 1-22, April.
    15. 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.
    16. Anger, Silke & Camehl, Georg & Peter, Frauke, 2017. "Involuntary job loss and changes in personality traits," Journal of Economic Psychology, Elsevier, vol. 60(C), pages 71-91.
    17. Fabian Kosse & Thomas Deckers & Pia Pinger & Hannah Schildberg-Hörisch & Armin Falk, 2020. "The Formation of Prosociality: Causal Evidence on the Role of Social Environment," Journal of Political Economy, University of Chicago Press, vol. 128(2), pages 434-467.
    18. Carmit Segal, 2012. "Working When No One Is Watching: Motivation, Test Scores, and Economic Success," Management Science, INFORMS, vol. 58(8), pages 1438-1457, August.
    19. Peter Gottschalk, 2005. "Can work alter welfare recipients' beliefs?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(3), pages 485-498.
    20. Alexander Cappelen & John List & Anya Samek & Bertil Tungodden, 2020. "The Effect of Early-Childhood Education on Social Preferences," Journal of Political Economy, University of Chicago Press, vol. 128(7), pages 2739-2758.
    21. Jorge Luis Garcia & Frederik Bennhoff & Duncan Ermini Leaf & James J. Heckman, 2021. "The Dynastic Benefits of Early Childhood Education," Working Papers 2021-033, Human Capital and Economic Opportunity Working Group.
    22. Jin Zhou & Bei Liu & LU Mai, 2020. "The Impact of a Prototypical Home Visiting Program on Child Skills," Working Papers 2020-047, Human Capital and Economic Opportunity Working Group.
    23. Ulrike Malmendier & Stefan Nagel, 2011. "Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 373-416.
    24. Almlund, Mathilde & Duckworth, Angela Lee & Heckman, James & Kautz, Tim, 2011. "Personality Psychology and Economics," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 1-181, Elsevier.
    25. James Heckman & Rodrigo Pinto & Peter Savelyev, 2013. "Understanding the Mechanisms through Which an Influential Early Childhood Program Boosted Adult Outcomes," American Economic Review, American Economic Association, vol. 103(6), pages 2052-2086, October.
    26. Jin Zhou & James J. Heckman & Bei Liu & Mai Lu & Susan M. Chang & Sally Grantham-McGregor, 2022. "Comparing China REACH and the Jamaica Home Visiting Program," NBER Working Papers 30529, National Bureau of Economic Research, Inc.
    27. Lex Borghans & Huub Meijers & Bas Ter Weel, 2008. "The Role Of Noncognitive Skills In Explaining Cognitive Test Scores," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 2-12, January.
    28. Sule Alan & Seda Ertac, 2019. "Mitigating the Gender Gap in the Willingness to Compete: Evidence from a Randomized Field Experiment," Journal of the European Economic Association, European Economic Association, vol. 17(4), pages 1147-1185.
    29. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    30. Blattman, Christopher & Sheridan, Margaret A. Ph.D. & Jamison, Julian C. & Chaskel, Sebastian, 2022. "Cognitive behavior therapy reduces crime and violence over 10 years: Experimental evidence," SocArXiv q85ux, Center for Open Science.
    31. Rong Hai & James J. Heckman, 2022. "The Causal Effects of Youth Cigarette Addiction and Education," NBER Working Papers 30304, National Bureau of Economic Research, Inc.
    32. Yann Algan & Elizabeth Beasley & Sylvana Côté & Jungwee Park & Richard E. Tremblay & Frank Vitaro, 2022. "The Impact of Childhood Social Skills and Self-Control Training on Economic and Noneconomic Outcomes: Evidence from a Randomized Experiment Using Administrative Data," American Economic Review, American Economic Association, vol. 112(8), pages 2553-2579, August.
    33. Sara B. Heller & Anuj K. Shah & Jonathan Guryan & Jens Ludwig & Sendhil Mullainathan & Harold A. Pollack, 2017. "Thinking, Fast and Slow? Some Field Experiments to Reduce Crime and Dropout in Chicago," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(1), pages 1-54.
    34. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David B. Huffman & Uwe Sunde, 2017. "Global Evidence on Economic Preferences," NBER Working Papers 23943, National Bureau of Economic Research, Inc.
    35. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 1645-1692.
    36. Christopher Blattman & Sebastian Chaskel & Julian C. Jamison & Margaret Sheridan, 2022. "Cognitive Behavior Therapy Reduces Crime and Violence over 10 Years: Experimental Evidence," NBER Working Papers 30049, National Bureau of Economic Research, Inc.
    37. Alexander Torgovitsky, 2019. "Nonparametric Inference on State Dependence in Unemployment," Econometrica, Econometric Society, vol. 87(5), pages 1475-1505, September.
    38. Callen, Mike & Isaqzadeh, Mohammad & Long, James D. & Sprenger, Charles, 2014. "Violence and risk preference: experimental evidence from Afghanistan," LSE Research Online Documents on Economics 102932, London School of Economics and Political Science, LSE Library.
    39. Flavio Cunha & James J. Heckman, 2008. "Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    40. Roland G. Fryer, Jr. & Steven D. Levitt & John A. List, 2015. "Parental Incentives and Early Childhood Achievement: A Field Experiment in Chicago Heights," NBER Working Papers 21477, National Bureau of Economic Research, Inc.
    41. García, Jorge Luis & Heckman, James J. & Ziff, Anna L., 2018. "Gender differences in the benefits of an influential early childhood program," European Economic Review, Elsevier, vol. 109(C), pages 9-22.
    42. Monica P. Bhatt & Sara B. Heller & Max Kapustin & Marianne Bertrand & Christopher Blattman, 2023. "Predicting and Preventing Gun Violence: An Experimental Evaluation of READI Chicago," NBER Working Papers 30852, National Bureau of Economic Research, Inc.
    43. Michael Callen & Mohammad Isaqzadeh & James D. Long & Charles Sprenger, 2014. "Violence and Risk Preference: Experimental Evidence from Afghanistan," American Economic Review, American Economic Association, vol. 104(1), pages 123-148, January.
    44. Carol Ryff & Burton Singer, 2008. "Know Thyself and Become What You Are: A Eudaimonic Approach to Psychological Well-Being," Journal of Happiness Studies, Springer, vol. 9(1), pages 13-39, January.
    45. Pollak, Robert A., 1976. "Habit formation and long-run utility functions," Journal of Economic Theory, Elsevier, vol. 13(2), pages 272-297, October.
    46. Sutter, Matthias & Zoller, Claudia & Glätzle-Rützler, Daniela, 2019. "Economic behavior of children and adolescents – A first survey of experimental economics results," European Economic Review, Elsevier, vol. 111(C), pages 98-121.
    47. Sule Alan & Seda Ertac, 2018. "Fostering Patience in the Classroom: Results from Randomized Educational Intervention," Journal of Political Economy, University of Chicago Press, vol. 126(5), pages 1865-1911.
    48. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    49. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-763, Part I Ju.
    50. Christopher Blattman & Sebastian Chaskel & Julian C. Jamison & Margaret Sheridan, 2022. "Cognitive behavior therapy reduces crime and violence over 10 years: Experimental evidence," Discussion Papers 2203, University of Exeter, Department of Economics.
    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. Caliendo, Marco & Cobb-Clark, Deborah A. & Silva-Goncalves, Juliana & Uhlendorff, Arne, 2024. "Locus of control and the preference for agency," European Economic Review, Elsevier, vol. 165(C).

    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. Heckman, James J. & Jagelka, Tomáš & Kautz, Tim, 2019. "Some Contributions of Economics to the Study of Personality," IZA Discussion Papers 12753, Institute of Labor Economics (IZA).
    2. Breitkopf, Laura & Chowdhury, Shyamal K. & Priyam, Shambhavi & Schildberg-Hörisch, Hannah & Sutter, Matthias, 2020. "Do economic preferences of children predict behavior?," DICE Discussion Papers 342, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    3. Kautz, Tim & Heckman, James J. & Diris, Ron & ter Weel, Bas & Borghans, Lex, 2014. "Fostering and Measuring Skills: Improving Cognitive and Non-Cognitive Skills to Promote Lifetime Success," IZA Discussion Papers 8696, Institute of Labor Economics (IZA).
    4. Marco Castillo & John A. List & Ragan Petrie & Anya Samek, 2024. "Detecting Drivers of Behavior at an Early Age: Evidence from a Longitudinal Field Experiment," Journal of Political Economy, University of Chicago Press, vol. 132(12), pages 3942-3977.
    5. Etienne Dagorn & David Masclet & Thierry Penard, 2022. "The Behavioral Determinants of School Achievement: A Lab in the Field Experiment in Middle School," Economics Working Paper Archive (University of Rennes & University of Caen) 2022-05, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    6. James J. Heckman & Chase O. Corbin, 2016. "Capabilities and Skills," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 17(3), pages 342-359, July.
    7. James Heckman & Tim Kautz, 2013. "Fostering and Measuring Skills: Interventions That Improve Character and Cognition," Working Papers 2013-019, Human Capital and Economic Opportunity Working Group.
    8. Zvonimir Bašić & Stefania Bortolotti & Daniel Salicath & Stefan Schmidt & Sebastian Schneider & Matthias Sutter, 2024. "One size fits all? The interplay of incentives, effort provision, and personality," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2024_13, Max Planck Institute for Research on Collective Goods.
    9. Matthias Sutter & Michael Weyland & Anna Untertrifaller & Manuel Froitzheim, 2020. "Financial literacy, risk and time preferences - Results from a randomized educational intervention," Working Papers 2020-27, Faculty of Economics and Statistics, Universität Innsbruck.
    10. Matthias Sutter & Michael Weyland & Anna Untertrifaller & Manuel Froitzheim & Sebastian O. Schneider, 2023. "Financial Literacy, Experimental Preference Measures and Field Behavior – A Randomized Educational Intervention," ECONtribute Discussion Papers Series 229, University of Bonn and University of Cologne, Germany.
    11. Kosse, Fabian & Tincani, Michaela M., 2020. "Prosociality predicts labor market success around the world," Munich Reprints in Economics 75115, University of Munich, Department of Economics.
    12. Falk, Armin & Abeler, Johannes & Kosse, Fabian, 2021. "Malleability of preferences for honesty," CEPR Discussion Papers 16164, C.E.P.R. Discussion Papers.
    13. Berger, Eva M. & Fehr, Ernst & Hermes, Henning & Schunk, Daniel & Winkel, Kirsten, 2020. "The Impact of Working Memory Training on Children's Cognitive and Noncognitive Skills," IZA Discussion Papers 13338, Institute of Labor Economics (IZA).
    14. Jorge Luis García & James J. Heckman, 2023. "Parenting Promotes Social Mobility Within and Across Generations," Annual Review of Economics, Annual Reviews, vol. 15(1), pages 349-388, September.
    15. Francesconi, Marco & Heckman, James J, 2015. "Symposium on Child Development and Parental Investment: Introduction," Economics Discussion Papers 16868, University of Essex, Department of Economics.
    16. Uta Bolt & Eric French & Jamie Hentall-MacCuish & Cormac O'Dea, 2021. "The intergenerational elasticity of earnings: exploring the mechanisms," IFS Working Papers W21/07, Institute for Fiscal Studies.
    17. Tim Friehe & Markus Pannenberg, 2020. "Time preferences and political regimes: evidence from reunified Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 349-387, January.
    18. Balart, Pau & Oosterveen, Matthijs & Webbink, Dinand, 2018. "Test scores, noncognitive skills and economic growth," Economics of Education Review, Elsevier, vol. 63(C), pages 134-153.
    19. Sule Alan & Ceren Baysan & Mert Gumren & Elif Kubilay, 2021. "Building Social Cohesion in Ethnically Mixed Schools: An Intervention on Perspective Taking," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2147-2194.
    20. Sneha Elango & Jorge Luis García & James J. Heckman & Andrés Hojman, 2015. "Early Childhood Education," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 2, pages 235-297, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    traits; philosophy; ethics; economic models;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

    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:iza:izadps:dp16133. 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: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.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.