In lectures I often reference the differences in inherited personality traits have on human development. Agreeableness is an interesting trait and influences a great deal about what we will earn in the market place. Highly agreeable people are often much more generous and relationship orientated in competitive market places which is driven by numbers. Highly agreeable people tend to work in support / caring professions which is paid less. They are also less likely to haggle for more pay than there less agreeable counterparts.
An interesting example of this is the emergence of Social Enterprises. These are businesses that are developed to invest profits generated by trade into good causes. However, studies show that they are likely to place the good causes over the need to generate income and rely heavily on grants rather than developing free trade profits. This is a contradiction, as the more money they generate the more they could help. But as they are often managed by highly agreeable people, this understanding is often lost.
This recent study explored how agreeableness as a personality trait influences people in a more general financial sense. It found nice people may be at greater risk of bankruptcy and other financial hardships compared with their less agreeable peers, not because they are more cooperative, but because they don't value money as much, according to research published by the American Psychological Association.
"We were interested in understanding whether having a nice and warm personality, what academics in personality research describe as agreeableness, was related to negative financial outcomes," said Sandra Matz, PhD, of Columbia Business School and lead author of the study published in the Journal of Personality and Social Psychology. "Previous research suggested that agreeableness was associated with lower credit scores and income. We wanted to see if that association held true for other financial indicators and, if so, better understand why nice guys seem to finish last."Matz and her co-author, Joe Gladstone, PhD, of University College London, analyzed data collected from more than 3 million participants using multiple methods: two online panels, a national survey, bank account data and publicly available geographic data. Their analyses investigated whether the reason agreeable individuals were more likely to experience financial hardship was because of their more cooperative negotiation style or instead the lower value they assign to money.
"We found that agreeableness was associated with indicators of financial hardship, including lower savings, higher debt and higher default rates," said Gladstone. "This relationship appears to be driven by the fact that agreeable people simply care less about money and therefore are at higher risk of money mismanagement."The researchers also found that agreeable people were not all equally likely to suffer financially, with income playing an important role in the relationship between agreeableness and financial health."Not every agreeable person is at equal risk of experiencing financial hardship," Gladstone said. "The relationship was much stronger for lower-income individuals, who don't have the financial means to compensate for the detrimental impact of their agreeable personality."Interestingly, the researchers were surprised to find that even when agreeableness was measured in childhood, it still predicted greater financial hardship later in life.
The research included survey data from a cohort study, following the same individuals over more than 25 years.To further illustrate the connection, the researchers compared publicly available personality and financial data from two areas in the United Kingdom that both had similar per-capita income levels. The city that scored significantly higher on agreeableness also had 50 percent higher bankruptcy rate."Our results help us to understand one potential factor underlying financial hardship, which can have serious implications for people's well-being," said Matz. "Being kind and trusting has financial costs, especially for those who do not have the means to compensate for their personalities."
Materials provided by American Psychological Association.
Journal Reference:Sandra C. Matz, Joe J. Gladstone. Nice guys finish last: When and why agreeableness is associated with economic hardship.. Journal of Personality and Social Psychology, 2018; DOI: 10.1037/pspp0000220