Objectives: Healthcare resource allocation decisions are often informed by the expected gains in patients' quality-adjusted life-years. Misconceptions about ill-health's consequences for quality of life (QOL) may however affect evaluations of health states by the general population and hence affect resource allocation decisions informed by quality-adjusted life -years. We examine whether people selectively misestimate the QOL consequences of moderate anxiety or depression compared with other dimensions of health, and we test whether informing people of actual changes in QOL associated with health states changes appraisals of their relative undesirability. Methods: UK general population participants (N = 1259; in 2017) expressed preferences over moderate problems: anxiety or depression, self-care, and pain or discomfort. A randomized control trial design was used whereby a control group was given a functional description of each health state, and 2 intervention groups were additionally given information on the actual differences in either life satisfaction (LS) or day affect (DA) associated with experiencing each health state.Results: The LS (DA) group reported a higher preference for avoiding living with moderate anxiety or depression, being 13.4% (13.9%) more likely to choose it as most undesirable.Conclusion: Informing people of the change in LS or DA associated with health states before they appraise them is a feasible way to obtain informed preferences.

How do income and income inequality combine to influence subjective well-being? We examined the relation between income and life satisfaction in different societies, and found large effects of income inequality within a society on the relationship between individuals' incomes and their life satisfaction. The income-satisfaction gradient is steeper in countries with more equal income distributions, such that the positive effect of a 10% increase in income on life satisfaction is more than twice as large in a country with low income inequality as it is in a country with high income inequality. These findings are predicted by an income rank hypothesis according to which life satisfaction is derived from social rank. A fixed increment in income confers a greater increment in social position in a more equal society. Income inequality may influence people's preferences, such that in unequal countries people's life satisfaction is determined more strongly by their income.

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.

OBJECTIVE:Quality-adjusted life years (QALYs) are used to measure the health benefits associated with treatments. QALYs are derived from objective mortality data weighted by assessments made by the general population of the impact on health-related quality of life associated with particular health states. In this study, a simple change is introduced to improve the validity of QALYs by giving raters information about how people living in the health states rate the health states.METHOD:Participants from the general population (N = 155) judged 3 health states using a standard valuation technique after being randomly allocated to 1 of 2 groups. The intervention group was given patients' mean ratings of their own health states from worst to best imaginable health (0-100 scale) before providing their valuations, while the control group was given this information only after providing their valuations. The participants in both groups also indicated whether patients' mean ratings were higher, broadly similar, or lower than they previously expected.RESULTS:When the mean ratings given by patients were higher (lower) than expected, participants in the intervention group provided significantly higher (lower) valuations than participants in the control group. These findings show that participants adjust their valuations of a health state in the direction of the appraisals of those experiencing that state.CONCLUSION:Insofar as policymakers are committed to valuing health states using valuations given by people from the general population, it is desirable to elicit more informed values by providing people with information on how patients rate those states. (PsycINFO Database Record (c) 2019 APA, all rights reserved).

A number of structural equation models have been developed to examine change in 1 variable or the longitudinal association between 2 variables. The most common of these are the latent growth model, the autoregressive cross-lagged model, the autoregressive latent trajectory model, and the latent change score model. The authors first overview each of these models through evaluating their different assumptions surrounding the nature of change and how these assumptions may result in different data interpretations. They then, to elucidate these issues in an empirical example, examine the longitudinal association between personality traits and life satisfaction. In a representative Dutch sample (N = 8,320), with participants providing data on both personality and life satisfaction measures every 2 years over an 8-year period, the authors reproduce findings from previous research. However, some of the structural equation models overviewed have not previously been applied to the personality-life satisfaction relation. The extended empirical examination suggests intraindividual changes in life satisfaction predict subsequent intraindividual changes in personality traits. The availability of data sets with 3 or more assessment waves allows the application of more advanced structural equation models such as the autoregressive latent trajectory or the extended latent change score model, which accounts for the complex dynamic nature of change processes and allows stronger inferences on the nature of the association between variables. However, the choice of model should be determined by theories of change processes in the variables being studied.

Background: Central banks set economy-wide interest rates to meet exclusively economic objectives. There is a strong link between indebtedness and psychiatric morbidity at the individual level, with interest rates being an important factor determining ability to repay debt. However, no prior research has explored whether central bank interest rate changes directly influence mental health, nor whether this varies by levels of indebtedness. Methods: We use British data (N = 93,255) to explore whether the Bank of England base-rate affected how perceived burden of non-mortgage debt (low, medium, and high) influenced psychiatric morbidity. Psychiatric morbidity was measured using the General Health Questionnaire (GHQ-12). Our primary outcome measure was a binary indicator of "psychiatric caseness" (> 3 on a 0-12 scale). We also used the GHQ-12 as a continuous measure of distress. Results: When interest rates are high (low) there is an increased (decreased) risk of psychiatric morbidity only among those with a high debt burden (b = 0.026, p= 0.02). This result was robust to alternative explanations. Thus a 1 percentage point base-rate increase is associated with a 2.6% increase that someone with a high debt burden will experience psychiatric morbidity. Limitations: Our study uses subjective indicators of debt burden. We were unable to determine the mechanism behind our effect. Conclusions: Changes in central bank interest rates to meet economic objectives pose a threat to mental health. Mental health support is needed for those in debt and central banks may need to consider how their decisions influence population mental health.

The financial crisis of 2007/08 precipitated a severe global economic downturn, typically referred to as the Great Recession. However, in the United Kingdom this period has been marked by limited change in national indicators of subjective well-being. We assessed the life satisfaction change in response to the Great Recession in a sample of British adults (N = 8,661). We first show that on average the life satisfaction change across the sample was limited. However, average effects may mask substantial amounts of heterogeneity in the data. We therefore explore beyond this average effect to determine whether there were disproportionate changes (losses and gains) in life satisfaction in key sub-groups of the population. We found that individuals experiencing unemployment, who lost income, were sick or disabled, experienced the greatest well-being reductions. Contrastingly the life satisfaction of many individuals did not greatly change following the Great Recession and for some it may have even improved. Our work highlights vulnerable groups that may need additional help during recession periods and also cautions against the over reliance on average measures of well-being.

In recent research that colleagues and I published in the Journal of Affective Disorders, we explored how Bank of England interest rate changes from 1995 to 2008 influenced people's mental health. What we found is that for each 1% increase in interest rates, there was a 2.6% increase in the incidence of mental health issues experienced by those heavily indebted. Although there is always some margin for error in statistical estimates, this would translate to 20,000 additional cases of mental health difficulty in the UK. As well as the obvious health cost here, there is also a financial cost. Since one case of mental health has been estimated to cost somewhere in the order of £8,000, in terms of absences from work and lost quality of life, this would have an overall cost to society of £156m.

In this paper, we undertake the first examination of the effects of personality on individual economic choices over public environmental goods, using a stated preference approach. Based on three data sets from three separate choice modelling studies, we examine the effects of personality on preferences for the status quo, for changes in environmental quality, and over the costs of investing in environmental improvement. Using a hybrid choice framework, we show that incorporating personality research into economic models can provide valuable behavioural insights, enriching explanations of why the demand for environmental goods varies across people.

Chapter 6 Developing, Evaluating, and Using Subjective Scales of Personality, Preferences, and Well-Being: A Guide to Psychometrics for Psychologists and Economists Alex M. Wood, Alex M. WoodSearch for more papers by this authorChristopher J. Boyce, Christopher J. BoyceSearch for more papers by this author Alex M. Wood, Alex M. WoodSearch for more papers by this authorChristopher J. Boyce, Christopher J. BoyceSearch for more papers by this author Book Editor(s):Rob Ranyard, Rob RanyardSearch for more papers by this author First published: 23 June 2017 https://doi.org/10.1002/9781118926352.ch6Citations: 3 AboutPDFPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShareShare a linkShare onFacebookTwitterLinked InRedditWechat Abstract Psychometrics, an area of psychology that has developed to specifically ensure psychological constructs are measured with optimum reliability and validity, is virtually unheard of in economics. This chapter offers a guide to the necessary steps in developing subjective measures and introduces researchers to psychometrics, enabling them to evaluate measures used by others and use appropriate measures in their own research. The steps are the practical minimum of what one needs to show for psychometric development. Depending on the scale, other steps may be appropriate. For example, where there are predictions that mean levels of the scale will differ between groups (as in between clinical and non-clinical participants on a well-being measure), this should be shown directly. The chapter also highlights the importance of psychometrics for economic psychology research and then overview the essential components of developing psychometrically valid scales. Citing Literature Economic Psychology, First Edition RelatedInformation

A substantial literature in behavioural science and psychology shows that emotions affect human choices and values. This paper investigates whether such emotional impacts are also present in stated choice experiments for environmental goods. If this were so, it would introduce an additional element of context dependence to the welfare measures derived from such methods, and would be at odds with the rational choice model underlying welfare economics. A laboratory experiment using three different emotion treatments was combined with a stated preference choice experiment concerned with changes in coastal water quality and fish populations in New Zealand. No statistically significant effects of changes in emotional state on estimated preference parameters, willingness to pay or the randomness of choices were found. The paper concludes by questioning, why such a contrast exists with empirical findings in behavioural science.

Much previous research has examined the relationship between online socialising and mental health, but conclusions are mixed and often contradictory. In this present paper we unpack the online social networking - mental health relationship by examining to what extent the relationship between these variables is personality-specific. Consistent with the idea that communicating through the internet is fundamentally different from face-to-face socializing, we find that on average, use of social networking web-sites is negatively associated with mental health. However, we find that the mental health response is dependent upon an individual’s underlying personality traits. Specifically, individuals who are either relatively extraverted or agreeable are not substantively affected from spending significant amounts of time on social networking web-sites. On the other hand, individuals who are relatively more neurotic or conscientiousness are much more likely to experience substantive reductions in their mental health from using social networking web-sites. We suggest that if the aim of public policy is to mitigate the adverse mental health effects from excessive internet use, then one-size-fits all measures will likely be misplaced. More generally, our research highlights the importance of conducting differentiated analyses of internet users when examining the health effects from internet use.

Personality is important for a range of life outcomes. However, despite evidence that personality changes across time, there is a concerning tendency for researchers outside of personality psychology to treat measures of personality as if they are non–changing when establishing whether personality predicts important life outcomes. This is problematic when personality changes in response to outcomes of interest and creates a methodological issue that may result in misleading conclusions. We illustrate this methodological issue and suggest using measures before the outcome takes place to mitigate concerns. We then demonstrate, using data from Germany, that using post–event personality measures, as opposed to pre–outcome measures, to predict both occurrence of, and reactions to, socio–economic events results in inconsistent conclusions in the directions hypothesized and therefore increases the likelihood of Type 1 and Type 2 errors. This has implications for research investigating the importance of personality for psychological, behavioural, and socio–economic outcomes. Copyright © 2017 European Association of Personality Psychology

Existing research on Big Five personality and unemployment has relied on personality measures elicited after the respondents had already spent years in the labor market, an experience which could change personality. We clarify the direction of influence by using the British Cohort Study (N = 4,206) to examine whether conscientiousness and other Big Five personality traits at age 16-17 predict unemployment over age 16-42. Our hypothesis that higher conscientiousness in adolescence would predict lower unemployment was supported. In analyses controlling for intelligence, gender, and parental socioeconomic status, the less conscientious (-1SD) had a predicted probability of unemployment twice as high (3.4% vs 1.7%) as the highly conscientious (+1SD), an effect size comparable to intelligence. Mediation analysis revealed that academic motivation and educational attainment explained only 8.9% of this association. Fostering conscientiousness in early-life may be an effective way to reduce unemployment throughout adulthood.

Existing research on Big Five personality and unemployment has relied on personality measures elicited after the respondents had already spent years in the labor market, an experience which could change personality. We clarify the direction of influence by using the British Cohort Study (N = 4,206) to examine whether conscientiousness and other Big Five personality traits at age 16-17 predict unemployment over age 16-42. Our hypothesis that higher conscientiousness in adolescence would predict lower unemployment was supported. In analyses controlling for intelligence, gender, and parental socioeconomic status, the less conscientious (-1SD) had a predicted probability of unemployment twice as high (3.4% vs 1.7%) as the highly conscientious (+1SD), an effect size comparable to intelligence. Mediation analysis revealed that academic motivation and educational attainment explained only 8.9% of this association. Fostering conscientiousness in early-life may be an effective way to reduce unemployment throughout adulthood.

Existing research on Big Five personality and unemployment has relied on personality measures elicited after the respondents had already spent years in the labor market, an experience that could change personality. We clarify the direction of influence by using the British Cohort Study (N = 4,206) to examine whether conscientiousness and other Big Five personality traits at age 16-17 predict unemployment over age 16-42. Our hypothesis that higher conscientiousness in adolescence would predict lower unemployment was supported. In analyses controlling for intelligence, gender, and parental socioeconomic status, the less conscientious (-1 SD) had a predicted probability of unemployment twice as high (3.4% vs. 1.7%) as the highly conscientious (+1 SD), an effect size comparable to intelligence. Mediation analysis revealed that academic motivation and educational attainment explained only 8.9% of this association. Fostering conscientiousness in early life may be an effective way to reduce unemployment throughout adulthood. (PsycINFO Database Record

Loss aversion is considered a general pervasive bias occurring regardless of the context or the person making the decision. We hypothesized that conscientiousness would predict an aversion to losses in the financial domain. We index loss aversion by the relative impact of income losses and gains on life satisfaction. In a representative German sample ( N = 105,558; replicated in a British sample, N = 33,848), with conscientiousness measured at baseline, those high on conscientiousness have the strongest reactions to income losses, suggesting a pronounced loss aversion effect, whereas for those moderately unconscientious, there is no loss aversion effect. Our research (a) provides the first evidence of personality moderation of any loss aversion phenomena, (b) supports contextual perspectives that both personality and situational factors need to be examined in combination, (c) shows that the small but robust relationship between income and life satisfaction is driven primarily by a subset of people experiencing highly impactful losses.

On average, marriage tends to lead to temporary increases in life satisfaction, which quickly return to pre-marital levels. This general pattern, however, does not consider the personality of individuals entering into marriage. We examine whether following marriage pre-marital personality predicts different changes to life satisfaction in a sample of initially single German adults (N=2015), completing life satisfaction measures and indicating their marital status yearly for 8years (during which 468 married). We find that conscientious women experience greater life satisfaction following marriage than less conscientious women. Our data also indicate that introverted women and extraverted men experience longer-term life satisfaction benefits following marriage. Our results refute the claim of limited life satisfaction effects from marriage and caution against relying on average effects when examining the influence of life events on well-being.

This paper tests whether changes in “incidental emotions” lead to changes in economic choices. Incidental emotions are experienced at the time of an economic decision but are not part of the payoff from a particular choice. As such, the standard economic model predicts that incidental emotions should not affect behavior, yet many papers in the behavioral science and psychology literatures find evidence of such effects. In this paper, we used a standard procedure to induce different incidental emotional states in respondents, and then carried out a choice experiment on changes to an environmental good (beach quality). We estimated preferences for this environmental good and willingness to pay for changes in this good, and tested whether these were dependent on the particular emotional state induced. We also tested whether choices became more or less random when emotional states were induced, based on the notion of randomness in a standard random utility model. Contrary to our a-priori hypothesis we found no significant evidence of treatment effects, implying that economists need not worry about the effects of variations in incidental emotions on preferences and the randomness of choice, even when there is measured (induced) variation in these emotions.