Buying what people like you buy: Personality Homophily and Well-being in Consumer Behaviour

Recommender systems and personalised marketing algorithms now proliferate our daily lives, harnessing similarity to other profiles to guide our purchasing decisions. Recent research indicates that this personalisation can be good for our well-being, as spending in a way that fits our personality, can engender happiness. Less well-understood however, is the impact personality homophily (where people prefer to connect with others of similar personalities) has on consumer well-being. In this study, we investigate whether individuals who exhibit homophily in their consumption patterns, by buying what others of a similar personality buy, report higher well-being. We analyse over 12,000 personality questionnaires measuring the Big Five and well-being, linked to 3 million loyalty card transaction logs from a multi-national retailer. Personality homophily, or `buying what people like you buy', is quantified by introducing a novel metric, Personality Alignment (PA). Findings show that PA on Extroversion, Agreeableness, and Neuroticism positively predicts well-being, and that effects are strongest for those higher in Neuroticism. Given the rise of algorithm-assisted decision making, along with growing attention to ethical-AI, these results show that personality homophily can be leveraged in the design of future personalised marketing mechanisms, not just for greater sales, but also customer’s long term well-being.