Ruhr Economic Papers

Ruhr Economic Papers #424

Personality Traits and the Perception of Macroeconomic Indicators

by Andreas Orland

RUB, 07/2013, 44 S./p., 8 Euro, ISBN 978-3-86788-480-8 DOI: 10.4419/86788480



I examine the determinants of both perceived inflation and unemployment in one single survey and include personality traits (BFI-S) in the analysis. This is the first survey on this topic in Germany. My sample consists of 1,771 students from different fields and levels. Using PhD students’ estimates as a reference, I create categories for underestimation and overestimation of both variables. Multinomial logit regressions show that females overestimate both variables. Education and news consumption reduce misestimation. A higher level of Neuroticism is related with a higher probability to overestimate unemployment. Overstating (understating) one indicator is associated with overstating (understating) the other.

JEL-Classification: C20, D12

Keywords: Survey; inflation perception; unemployment perception; personality traits; cross-sectional heterogeneity