Browsing by Author "Schurer, Stefanie"

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ECON303: Economics: Applied Econometrics
(Victoria University of Wellington, 2012) Schurer, Stefanie
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ECON409: Economics: Advanced Econometrics B
(Victoria University of Wellington, 2011) Schurer, Stefanie
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ECON409: Economics: Advanced Econometrics B
(Victoria University of Wellington, 2012) Schurer, Stefanie
Open Access
Personality, well-being and the marginal utility of income: What can we learn from random coefficient models?
(Te Herenga Waka—Victoria University of Wellington, 2012) Schurer, Stefanie; Yong, Jongsay
Fixed effects models are the gold standard in empirical well-being research, however, their applicability is limited to controlling for intercept heterogeneity and identifying effects of time-varying variables. This paper investigates the usefulness of random coefficient models in controlling for heterogeneity in well-being and the marginal utility of income, and explores whether these forms of heterogeneity depend on the Big-Five personality traits. Using unique Australian longitudinal data that have personality measures available in two time periods we show that a Mundlak-adjusted random coefficient model yields almost identical results as the fixed effects model, making it a powerful modelling alternative when interest lies in multiple forms of heterogeneity. Big-Five personality explains 10 percent of the variation in intercept heterogeneity and 6-7 percent of the variation in the marginal utility of income. For women, we suggest that the marginal utility of income is significantly linked to personality, implying important gender-differences in the expected effectiveness of financial incentives to influence behaviour.
Open Access
The stability of big-five personality traits
(Te Herenga Waka—Victoria University of Wellington, 2011) Cobb-Clark, Deborah; Schurer, Stefanie
We use a large, nationally-representative sample of working-age adults to demonstrate that personality (as measured by the Big Five) is stable over a four-year period. Average personality changes are small and do not vary substantially across age groups. Intra-individual personality change is generally unrelated to experiencing adverse life events and is unlikely to be economically meaningful. Like other non-cognitive traits, personality can be modeled as a stable input into many economic decisions.
Open Access
Two economists’ musings on the stability of locus of control
(Te Herenga Waka—Victoria University of Wellington, 2011) Cobb-Clark, Deborah; Schurer, Stefanie
Empirical studies of the role of non-cognitive skills in driving economic behavior often rely heavily on the assumption that these skills are stable over the relevant time frame. We analyze the change in a specific non-cognitive skill, i.e. locus of control, in order to directly assess the validity of this assumption. We find that short- and medium-run changes in locus of control are rather modest on average, are concentrated among the young or very old, do not appear to be related to the demographic, labor market, and health events that individuals experience, and are unlikely to be economically meaningful. Still, there is no evidence that locus of control is truly time-invariant implying that the use of lagged measures results in an errors-in-variables problem that could downward bias the estimated wage return to locus of control by as much as 50 percent. Those researchers wishing to analyze the economic consequences of non-cognitive skills should consider (i) restricting their analysis to the working-age population for whom there is little evidence of systematic change in skill levels and (ii) accounting for error in the skill measures they employ.