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Toward the Integration of Personality Theory and Decision Theory in the Explanation of Economic and Health Behavior

Abstract

Personality psychology and economics have taken different approaches to understanding individual differences, with the former emphasizing variables derived from factor analysis, and the latter emphasizing variables derived from decision theory. In a data set on trainee truckers in a large US company, we compare the predictive power of measurements derived from decision theory and personality theory and relate the two sets of measurements to each other. We show that personality traits have a comparable or stronger predictive power than do economic preferences for several dependent variables, including credit score, job persistence, and heavy truck accidents. They also have strong predic┬Čtive power for Body Mass Index (BMI) and smoking status. Further the decision theory and personality variables are meaningfully related. For example, we confirm that cognitive ability explains a substantial part of time preferences, and find that Neuroticism and cognitive ability and together explain attitudes toward risk.