Working Paper: NBER ID: w20438
Authors: Oded Galor; Mer Zak
Abstract: This research explores the origins of the distribution of time preference across regions. It advances the hypothesis, and establishes empirically, that geographical variations in natural land productivity and their impact on the return to agricultural investment have had a persistent effect on the distribution of long-term orientation across societies. In particular, exploiting a natural experiment associated with the expansion of suitable crops for cultivation in the course of the Columbian Exchange, the research establishes that agro-climatic characteristics in the pre-industrial era that were conducive to higher return to agricultural investment, triggered selection and learning processes that had a persistent positive effect on the prevalence of long-term orientation in the contemporary era.
Keywords: Time Preference; Agricultural Productivity; Long-Term Orientation
JEL Codes: O10; O40; Z10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher potential crop yield (Q16) | increased long-term orientation (D15) |
| higher preindustrial caloric yield (Q49) | increased long-term orientation (D15) |
| higher crop yields in parental country of origin (Q16) | positively affect long-term orientation of second-generation migrants (F24) |