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Differential psychology studies the ways in which individuals differ in their behavior and the processes that underlie it. This is a discipline that develops classifications (taxonomies) of psychological individual differences. This is distinguished from other aspects of psychology in that although psychology is ostensibly a study of individuals, modern psychologists often study groups, or attempt to discover general psychological processes that apply to all individuals. This particular area of psychology was first named and still retains the name of "differential psychology" by William Stern in his book (1900).
While prominent psychologists, including Stern, have been widely credited for the concept of individual differences, historical records show that it was Charles Darwin (1859) who first spurred the scientific interest in the study of individual differences. His interest was further pursued by his half-cousin Francis Galton in his attempt to quantify individual differences among people.
For example, in evaluating the effectiveness of a new therapy, the mean performance of the therapy in one treatment group might be compared to the mean effectiveness of a placebo (or a well-known therapy) in a second, control group. In this context, differences between individuals in their reaction to the experimental and control manipulations are actually treated as errors rather than as interesting phenomena to study. This approach is applied because psychological research depends upon statistical controls that are only defined upon groups of people.
Importantly, individuals can also differ not only in their current state, but in the magnitude or even direction of response to a given stimulus. Such phenomena, often explained in terms of inverted-U response curves, place differential psychology at an important location in such endeavours as personalized medicine, in which diagnoses are customised for an individual's response profile.
Individual differences research typically includes personality, temperament (neuro-chemically-based behavioural traits), motivation, intelligence, ability, IQ, interests, values, self-concept, self-efficacy, and self-esteem (to name just a few). There are few remaining "differential psychology" programs in the United States, although research in this area is very active. Current researchers are found in a variety of applied and experimental programs, including clinical psychology, educational psychology, Industrial and organizational psychology, personality psychology, social psychology, behavioral genetics, and developmental psychology programs, in the neo-Piagetian theories of cognitive development in particular.
To study individual differences, psychologists use a variety of methods. Psychophysiological experiments on both humans and other mammals include EEG, PET-scans, MRI, functional MRI, neurochemistry  experiments with neurotransmitter and hormonal systems, caffeine and controlled drug challenges. These methods can be used for a search of biomarkers of consistent, biologically-based behavioural patterns (temperament traits and symptoms of psychiatric disorders). Other sets of methods include behavioural experiments, to see how different people behave in similar settings. Behavioural experiments are often used in personality and social psychology, and include lexical and self-report methods where people are asked to complete paper-based and computer-based forms prepared by psychologists.