Friday, June 8, 2012

Research Paper of the Day: Can Money Change Who We Are?

Very interesting paper from Nattavudh Powdthavee (Nanyang Technological University and IZA), 
Christopher J. Boyce (University of Manchester), and Alex M. Wood (University of Manchester).

They look at people who have won the lottery and if that event has had an effect on various personality traits of the winner.  It appear that winning the lottery can have an impact on your personality but there is a lot more research to do before we know why.

Can Money Change Who We Are? Estimating the Effects of Unearned Income on Measures of Incentive-Enhancing Personality Traits*The importance of noncognitive childhood skills in predicting higher wages is well documented in economics. This paper studies the reverse. Using surveys of lottery winners, we analyze the effects of unearned income on the Big Five personality traits. After correcting for potential endogeneity problems from prize sizes, we find that unearned income improves traits that predict pro-social and cooperative behaviors, preferences for social contact, empathy, and gregariousness, and reduces individuals’ tendency toward negative emotional states: known in economics literature as incentive-enhancing personality traits. Our results support the possibility of scope for later interventions to improve the personality traits of adults.
Can Money Change Who We Are?