Professor Alex Wood

Mental Health and Happiness across Psychology, Economics, and Psychiatry/Medicine

Centennial Chair in Psychology at LSE, London School of Economics and Political Science

Wood, A. M., & Boyce, C. (in press). Developing, evaluating and using subjective scales of personality, preferences, and well-being: A guide to psychometrics for psychologists and economists. In Ranyard, R. (Ed). Economic psychology: the science of economic mental life and behaviour. Chichester, UK: Wiley.

Integrating Economics with Psychology to Understand Well-Being

A huge growth area within mainstream economics involves using people's subjective ratings of their happiness to evaluate the consequences of macro-economic policy and micro-economic individual (e.g., occupational and financial) decision making.
The recognition for the need for this area emerged from the growth of the Nobel Prize winning area of Behavioral Economics, which showed that "utility", what people value, cannot be measured through observed behavior, as this is too dependent on the situation in which people act and their systematically biased cognitive processing. As such, measuring people's utility directly thorough happiness questions becomes preferable. These data are now frequently collected in nationally representative panel surveys, the use of which is now the formal policy of several state organizations (including the Scottish Government and the OECD, both of whom we advise directly). However, by and large "happiness economics" has ignored the vast and relevant psychological literature, resulting in miss-leading conclusions and much reinventing of the wheel. Our research has been instrumental in correcting this deficit, through showing through which psychological mechanisms income relates to well-being, under which psychological situations this relationship occurs, and through showing how appreciating these mechanisms and boundary conditions leads to different policy recommendations. We are also pioneering the linkage of economics with individual difference/personality psychology. The first wave of behavioral economics transformed the field through introducing more realistic models of how people process information in general, through linking with to field of cognitive psychology, a field concerned with generalities. The elephant in the room is that we still have a very poor understanding of specific reactions to economic situations and interventions ("high model heterogeneity"); statistical prediction is poor, and policies that help people in general may systematically harm specific vulnerable groups of people who are readily identifiable through their personality characteristics. We aim to instigate a second wave of behavioral economics, linking with a different and untouched field of psychology, with as much potential to impact on the field as the first. We are generously funded by the UK Economic Research Council (ESRC) to do this and our early papers have enjoyed some considerable success, including the German Socio-Economic Pannel (GSOEP) award for "Best Paper, 2012-2014.

Economics and Subjective Well-Being

Daly, M., Boyce, C. J., & Wood, A. M. (in press). A social rank explanation of how money influence health. Health Psychology.

Hounkpatin, H. O., Wood, A. M., Brown, G. D. A., Dunn, G. (in press). Why does income relate to depressive symptoms? Testing the income rank hypothesis longitudinally. Social Indicators Research.

Hounkpatin, H. O., Wood, A.M., & Dunn, G. (in press). Does income relate to health due to psychosocial or material factors? Consistent support for the psychosocial hypothesis requires operationalization with income rank not the Yitzhaki Index. Social Science & Medicine. Download.

Boyce, C. J., Wood, A. M., Banks, J., Clarke, A. E., & Brown, G. D. A. (2013). Money, well-being, and loss aversion: Does an income loss have a greater effect on well-being than an equivalent income gain? Psychological Science, 24, 2557-2562. Download.

Boyce, C. J., Wood, A. M., & Powdthavee, N. (2013). Is personality fixed? Personality changes as much as "variable" economic factors and more strongly predicts changes to life satisfaction. Social Indicators Research, 111, 287–305. Download.

Wetherall, K. Daly, M., Robb, K. A., Wood, A. M., & O’Connor, R. C. (in press). Explaining the income and suicidality relationship: Income rank is more strongly associated with suicidal thoughts and attempts than income. Social Psychiatry and Psychiatric Epidemiology.

Wood, A. M., Boyce, C. J., Moore, S. C., & Brown, G. D. A. (2012). An evolutionary based social rank explanation of why low income predicts mental distress: A 17 year cohort study of 30,000 people. Journal of Affective Disorders,136, 882-888.

Boyce, C. J., & Wood, A. M. (2010). Money or mental health: The cost of alleviating psychological distress with monetary compensation versus psychological therapy. Health Economics, Policy and Law, 5, 509-516. Download.

Personality and Economics

Boyce, C. J., Wood, A. M., Daly, M., & Sedikides, C. (in press). Personality change following unemployment. Journal of Applied Psychology.

Boyce, C. J., & Wood, A. M. (2011). Personality prior to disability determines adaptation: Agreeable individuals recover lost life satisfaction faster and more completely. Psychological Science, 22,1397-1402.

Boyce, C. J., & Wood, A. M. (2011). Personality and the marginal utility of income: Personality interacts with increases in household income to determine life satisfaction. Journal of Economic Behavior & Organization, 78, 183-191. Download.

Boyce, C. J., & Wood, A., M., & Brown, G. D. A. (2010). The dark side of conscientiousness: Conscientious people experience greater drops in life satisfaction following unemployment. Journal of Research in Personality, 44, 535-539. Download.