Working Paper: CEPR ID: DP5505
Authors: Luigi Guiso; Paola Sapienza; Luigi Zingales
Abstract: Economists have been reluctant to rely on culture as a possible determinant of economic phenomena. The notion of culture is so broad and the channels through which it can enter the economic discourse so vague that it is difficult to design testable hypotheses. In this paper we show this does need to be the case. We introduce a narrower definition of culture that allows for a simple methodology to develop and test cultural-based explanations. We also present several applications of this methodology: from the choice to become entrepreneur to that of how much to save, to end with the political decision on income redistribution.
Keywords: culture; cultural economics; economic outcomes
JEL Codes: A10; J10; Z10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| culture (Z00) | expectations and preferences (D84) |
| expectations and preferences (D84) | economic outcomes (F61) |
| religious affiliations (Z12) | preferences for redistribution (D39) |
| preferences for redistribution (D39) | state-level fiscal policies (H79) |
| cultural beliefs and values (Z18) | individual preferences (D11) |
| cultural beliefs and values (Z18) | expectations (D84) |
| trust levels (Z13) | economic behaviors (D22) |
| higher trust levels (Z13) | increased probabilities of self-employment (J23) |
| cultural factors (Z10) | cross-country differences in savings rates (E21) |
| cultural component of beliefs (Z18) | economic outcomes (F61) |