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

Melbourne Institute Working Paper No. 14/10

Date: July 2010


Stefanie Schurer
Jongsay Yong


People differ in their basic levels of happiness and in the way they value income and work. 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.

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