Another study, conducted on more than 8,000 Australians, found that personality changes during this same time period occurred as often as changes in socio-economic factors, such as income, unemployment, and marital status. Together, these two studies add to a growing body of literature suggesting that personality changes are related to changes in life satisfaction, and that personality change can even be a better predictor of life satisfaction than many of the external variables that are normally considered in economic models of happiness.

Changes from within do matter—and these changes may indeed be undervalued in their role in determining happiness. In fact, they may even have strong economic consequences. The researchers calculated that a small decrease in neuroticism, for instance, could be worth $314,000—"the implied change in income that would be needed to raise life satisfaction by the same amount as [a change of] one standard deviation" in neuroticism, in the study's words. Considering the average U.S. household income is around $88,000, a little less anxiety perhaps could be worth leaps up the economic ladder.

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Not only can a personality makeover affect happiness, but a change in happiness, regardless of the source, can also have a big impact on personality. It’s possible, for instance, that circumstances that consistently make a person feel negative (e.g., being in an abusive relationship) can lead that person to be more anxious or cautious than they would be otherwise. Environments that support well-being (e.g., a terrific job that pays well) may encourage someone to keep acting the way they do, or even to become more conscientious, agreeable, and so forth.

In another study drawing on the HILDA dataset from 2005 to 2009, the psychologist Christopher Soto investigated this possibility among a sample of 16,367 Australians, ages 15 to 93. Consistent with the other studies reviewed here, personality traits predicted subsequent changes in well-being. However, well-being also predicted subsequent changes in personality. People who began the study with high levels of extraversion, agreeableness, conscientiousness, and emotional stability showed increases in happiness, more frequent positive emotions, and less frequent negative emotions. But the reverse direction was also true: those with initially high levels of happiness tended to show growth in agreeableness, conscientiousness, emotional stability, and introversion over time.

These results suggest that a full understanding of the relationship between personality and happiness must take into account their reciprocal influence on each other. Indeed, these reciprocal effects can compound over time. As Soto shows, two people who only differ by six percentage points on a trait (e.g., 47th versus. 53rd percentile) at age 20 can differ by as much as 48 percentage points (26th vs. 74th percentile) at age 60, assuming that the original difference persists over time at the same rate.