Do personality traits matter for wellbeing in Ghana? Who is poor but happy and non-poor but unhappy?

Recently, economists have become increasingly interested in understanding how behavioural indicators explain development outcomes. Using a nationally representative panel survey data in Ghana and employing the pooled logistic and random effects logistic regression methods, this study analyses the relationship between the “Big Five Personality Traits” (i.e., Extraversion, Agreeableness, Conscientiousness, Emotional Stability (neuroticism) and Openness to Experience) and individuals’ wellbeing (specifically, happiness and poverty status). The study further examines whether one’s personality traits are significantly associated with the alignment between one’s subjective wellbeing (happiness) and objective wellbeing (poverty status). We found statistically significant relationship between personality traits and wellbeing but with heterogeneities across traits and by the two wellbeing measures. We found further that neuroticism is negatively associated with the alignment of both happiness and poverty statuses of an individual. However, the other personality traits showed no statistically significant relationship with the alignment (or non-alignment) between the subjective and objective measures of wellbeing. These results are robust to alternative regression techniques (specifically, the Heckman Copula and weighted least squares) used to address attrition bias in the study. The key message of the study is that an integrated approach to policymaking which pays attention to the interplay between economic, social, and psychological factors is crucial to overall welfare – reducing poverty and maintaining happiness.