Working Paper: NBER ID: w11999
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; Economic Outcomes; Entrepreneurship; Redistribution
JEL Codes: Z1; A1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Culture (Z00) | Economic Preferences and Expectations (D11) |
| Economic Preferences and Expectations (D11) | Economic Outcomes (P47) |
| Cultural Beliefs (Z18) | Economic Preferences (D11) |
| Cultural Beliefs (Z18) | Fiscal Policies (H39) |
| Religious Affiliation and Ethnic Background (J15) | Preferences for Redistribution (D39) |
| Preferences for Redistribution (D39) | Fiscal Policies (H39) |
| Trust (G21) | Entrepreneurial Decisions (L26) |
| Cultural Beliefs (Z18) | Economic Behavior (D22) |
| Cultural Beliefs (Z18) | Savings Rates (G51) |
| Cultural Beliefs (Z18) | Political Preferences for Redistribution (H23) |
| Cultural Background (Z10) | Likelihood of Becoming an Entrepreneur (L26) |