Working Paper: NBER ID: w24291
Authors: Anke Becker; Benjamin Enke; Armin Falk
Abstract: Variation in economic preferences is systematically related to both individual and aggregate economic outcomes, yet little is known about the origins of the worldwide preference variation. This paper uses globally representative data on risk aversion, time preference, altruism, positive reciprocity, negative reciprocity, and trust to uncover that contemporary preference heterogeneity has its roots in the structure of the temporally distant migration patterns of our very early ancestors: In dyadic regressions, differences in preferences between populations are significantly increasing in the length of time elapsed since the ancestors of the respective groups broke apart from each other. To document this pattern, we link genetic and linguistic distance measures to population-level preference differences (i) in a wide range of cross-country regressions, (ii) in within-country analyses across groups of migrants, and (iii) in analyses that leverage variation across linguistic groups. While temporal distance drives differences in all preferences, the patterns are strongest for risk aversion and prosocial traits.
Keywords: economic preferences; migration patterns; risk aversion; prosocial traits
JEL Codes: D03
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| temporal distance (C41) | preference differences (D11) |
| historical migration patterns (F22) | economic preferences (D11) |
| temporal distance (C41) | risk aversion (D81) |
| temporal distance (C41) | prosocial traits (D64) |
| temporal distance (C41) | altruism (D64) |
| temporal distance (C41) | positive reciprocity (D64) |
| temporal distance (C41) | trust (G21) |
| temporal distance (C41) | patience (Y60) |
| temporal distance (C41) | negative reciprocity (Z13) |
| geographic distance (R12) | preference differences (D11) |