Boyce, Christopher J. (2009) Understanding fixed effects in human well-being. Journal of Economic Psychology . ISSN 0167-4870

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Abstract

In studies of subjective well-being, economists and other researchers typically use a fixed or random effect estimation to control for unobservable heterogeneity across individuals. Such individual heterogeneity, although substantially reducing the estimated effect of many characteristics, is little understood. This paper shows that personality measures can account for 20% of this heterogeneity and a further 13% can be accounted for by other observable between-person information. This paper then demonstrates that the use of personality measures, in a new technique developed by [Plumper, T., Troeger, V.E. (2007). Efficient estimation of time-invariant and rarely changing variables in finite sample panel analyses with unit fixed effects, Political Analysis, 15(2), 124-139.], can help researchers obtain improved estimates for important characteristics such as marital status, disability and income. The paper argues that this has important practical implications.

Item Type:	Submitted Journal Article
Subjects:	H Social Sciences > HB Economic Theory B Philosophy. Psychology. Religion > BF Psychology
Divisions:	Other > Institute of Advanced Study Faculty of Science > Psychology
Library of Congress Subject Headings (LCSH):	Deutsches Institut für Wirtschaftsforschung. Projektgruppe "Das Sozio-ökonomische Panel", Satisfaction -- Research, Personality, Conduct of life, Consumer satisfaction -- Research
Journal or Publication Title:	Journal of Economic Psychology
Publisher:	Elsevier BV
ISSN:	0167-4870
Date:	6 September 2009
Identification Number:	10.1016/j.joep.2009.08.009
Status:	Peer Reviewed
Access rights to Published version:	Open Access
Funder:	Economic and Social Research Council (Great Britain) (ESRC)
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URI:	http://wrap.warwick.ac.uk/id/eprint/2527

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