UCL News


Nice people 'at a financial disadvantage', study says

12 October 2018

Nice people may be at greater risk of bankruptcy and other financial hardships, compared with their less agreeable peers, because they don't value money as much, according to research by UCL and Columbia Business School.


The study by Dr Joe Gladstone (UCL School of Management) and co-author Dr Sandra Matz (Columbia Business School) involved analysing data collected from more than three million participants using multiple methods: two online panels, a national survey, bank account data, and publicly available geographic data.

The study aimed to provide a better understanding of whether a nice and warm personality - usually described as 'agreeableness' by academics in personality research - was related to negative financial outcomes. With previous research suggesting that agreeableness was associated with lower credit scores and income, the academics wanted to see if that association was also true for other financial indicators.

They found that the reason agreeable individuals were more likely to experience financial hardship was because they assigned a lower value to money, rather than because of their more cooperative negotiation style. 

Dr Gladstone said: "We found that agreeableness was associated with indicators of financial hardship, including lower savings, higher debt and higher default rates. 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."

They 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," Dr 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."

When agreeableness was measured in childhood, it still predicted greater financial hardship later in life, the researchers were surprised to find. The research included survey data from a cohort study, following the same individuals over more than 25 years.

The academics also 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 a 50 per cent 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 Dr Matz. "Being kind and trusting has financial costs, especially for those who do not have the means to compensate for their personalities."



Media contact

Kate Corry

Tel:  +44 (0)20 3108 6995

Email: k.corry@ucl.ac.uk