IDEAS home Printed from https://ideas.repec.org/p/hka/wpaper/2016-004.html
   My bibliography  Save this paper

The Nature and Predictive Power of Preferences: Global Evidence

Author

Listed:
  • Armin Falk

    (Universität Bonn)

  • Anke Becker

    (Bonn Graduate School of Economics)

  • Thomas Dohmen

    (Universität Bonn)

  • Benjamin Enke

    (University of Bonn)

  • David Huffman

    (University of Pittsburgh)

  • Uwe Sunde

    (University of Munich)

Abstract

This paper presents the Global Preference Survey, a globally representative dataset on risk and time preferences, positive and negative reciprocity, altruism, and trust. We collected these preference data as well as a rich set of covariates for 80,000 individuals, drawn as representative samples from 76 countries around the world, representing 90 percent of both the world's population and global income. The global distribution of preferences exhibits substantial variation across countries, which is partly systematic: certain preferences appear in combination, and follow distinct economic, institutional, and geographic patterns. The heterogeneity in preferences across individuals is even more pronounced and varies systematically with age, gender, and cognitive ability. Around the world, our preference measures are predictive of a wide range of individual-level behaviors including savings and schooling decisions, labor market and health choices, prosocial behaviors, and family structure. We also shed light on the cultural origins of preference variation around the globe using data on language structure.

Suggested Citation

  • Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2016. "The Nature and Predictive Power of Preferences: Global Evidence," Working Papers 2016-004, Human Capital and Economic Opportunity Working Group.
  • Handle: RePEc:hka:wpaper:2016-004
    Note: IP
    as

    Download full text from publisher

    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Falk_Becker_etal_2016_nature-predictive-power.pdf
    File Function: First version, November, 2015
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bart H.H. Golsteyn & Hans Grönqvist & Lena Lindahl, 2014. "Adolescent Time Preferences Predict Lifetime Outcomes," Economic Journal, Royal Economic Society, vol. 124(580), pages 739-761, November.
    2. Enrico Spolaore & Romain Wacziarg, 2015. "Ancestry, Language and Culture," NBER Working Papers 21242, National Bureau of Economic Research, Inc.
    3. Joseph Henrich, 2001. "In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies," American Economic Review, American Economic Association, vol. 91(2), pages 73-78, May.
    4. Donkers, Bas & Melenberg, Bertrand & Van Soest, Arthur, 2001. "Estimating Risk Attitudes Using Lotteries: A Large Sample Approach," Journal of Risk and Uncertainty, Springer, vol. 22(2), pages 165-195, March.
    5. Sutter, Matthias & Kocher, Martin G., 2007. "Trust and trustworthiness across different age groups," Games and Economic Behavior, Elsevier, vol. 59(2), pages 364-382, May.
    6. Wang, Mei & Rieger, Marc Oliver & Hens, Thorsten, 2011. "How Time Preferences Differ: Evidence from 45 Countries," Discussion Papers 2011/18, Norwegian School of Economics, Department of Business and Management Science.
    7. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    8. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2008. "Representative Trust And Reciprocity: Prevalence And Determinants," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 84-90, January.
    9. Quamrul Ashraf & Oded Galor, 2013. "The 'Out of Africa' Hypothesis, Human Genetic Diversity, and Comparative Economic Development," American Economic Review, American Economic Association, vol. 103(1), pages 1-46, February.
    10. Oded Galor & Ömer Özak, 2016. "The Agricultural Origins of Time Preference," American Economic Review, American Economic Association, vol. 106(10), pages 3064-3103, October.
    11. Juan C. Botero & Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "The Regulation of Labor," The Quarterly Journal of Economics, Oxford University Press, vol. 119(4), pages 1339-1382.
    12. Jeff Carpenter & Glenn Harrison & John List, 2005. "Field experiments in economics: An introduction," Artefactual Field Experiments 00034, The Field Experiments Website.
    13. Stelios Michalopoulos, 2012. "The Origins of Ethnolinguistic Diversity," American Economic Review, American Economic Association, vol. 102(4), pages 1508-1539, June.
    14. Alberto Alesina & Paola Giuliano & Nathan Nunn, 2013. "On the Origins of Gender Roles: Women and the Plough," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 469-530.
    15. Paola Giuliano, 2007. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 927-952, September.
    16. Luigi Guiso & Monica Paiella, 2008. "Risk Aversion, Wealth, and Background Risk," Journal of the European Economic Association, MIT Press, vol. 6(6), pages 1109-1150, December.
    17. Borghans, Lex & Golsteyn, Bart H.H., 2006. "Time discounting and the body mass index: Evidence from the Netherlands," Economics & Human Biology, Elsevier, vol. 4(1), pages 39-61, January.
    18. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    19. Thomas Dohmen & Benjamin Enke & Armin Falk & David Huffman & Uwe Sunde, 2016. "Patience and the Wealth of Nations," Working Papers 2016-012, Human Capital and Economic Opportunity Working Group.
    20. Desmet, Klaus & Ortuño-Ortín, Ignacio & Wacziarg, Romain, 2012. "The political economy of linguistic cleavages," Journal of Development Economics, Elsevier, vol. 97(2), pages 322-338.
    21. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-571, March.
    22. Samuel Bowles & Robert Boyd & Colin Camerer & Ernst Fehr & Herbert Gintis & Joseph Henrich & Richard McElreath, 2001. "In search of homo economicus: Experiments in 15 small-scale societies," Artefactual Field Experiments 00068, The Field Experiments Website.
    23. Bonin, Holger & Dohmen, Thomas & Falk, Armin & Huffman, David & Sunde, Uwe, 2007. "Cross-sectional earnings risk and occupational sorting: The role of risk attitudes," Labour Economics, Elsevier, vol. 14(6), pages 926-937, December.
    24. Jeffrey Carpenter & Erika Seki, 2011. "Do Social Preferences Increase Productivity? Field Experimental Evidence From Fishermen In Toyama Bay," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 612-630, April.
    25. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-1095, December.
    26. Lergetporer, Philipp & Sutter, Matthias & Angerer, Silvia & Glätzle-Rützler, Daniela, 2014. "The effects of language on children's intertemporal choices," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100350, Verein für Socialpolitik / German Economic Association.
    27. Quang Nguyen & Colin Camerer & Tomomi Tanaka, 2010. "Risk and Time Preferences Linking Experimental and Household Data from Vietnam," Post-Print halshs-00547090, HAL.
    28. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
    29. Ashraf, Quamrul & Galor, Oded, 2008. "Human Genetic Diversity and Comparative Economic Development," CEPR Discussion Papers 6824, C.E.P.R. Discussion Papers.
    30. M. Keith Chen, 2011. "The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets," Cowles Foundation Discussion Papers 1820, Cowles Foundation for Research in Economics, Yale University, revised Dec 2012.
    31. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 537-579.
    32. Daniel J. Benjamin & Sebastian A. Brown & Jesse M. Shapiro, 2013. "Who Is ‘Behavioral’? Cognitive Ability And Anomalous Preferences," Journal of the European Economic Association, European Economic Association, vol. 11(6), pages 1231-1255, December.
    33. Luigi Ventura, 2003. "Direct Measures of Time Preference," The Economic and Social Review, Economic and Social Studies, vol. 34(3), pages 293-310.
    34. M. Keith Chen, 2013. "The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets," American Economic Review, American Economic Association, vol. 103(2), pages 690-731, April.
    35. Ferdinand M. Vieider & Mathieu Lefebvre & Ranoua Bouchouicha & Thorsten Chmura & Rustamdjan Hakimov & Michal Krawczyk & Peter Martinsson, 2015. "Common Components Of Risk And Uncertainty Attitudes Across Contexts And Domains: Evidence From 30 Countries," Journal of the European Economic Association, European Economic Association, vol. 13(3), pages 421-452, June.
    36. Ferdinand Vieider & Thorsten Chmura & Tyler Fisher & Takao Kusakawa & Peter Martinsson & Frauke Mattison Thompson & Adewara Sunday, 2015. "Within- versus between-country differences in risk attitudes: implications for cultural comparisons," Theory and Decision, Springer, vol. 78(2), pages 209-218, February.
    37. Fearon, James D, 2003. "Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
    38. repec:hrv:faseco:33077826 is not listed on IDEAS
    39. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    40. Michael Kosfeld & Devesh Rustagi, 2015. "Leader Punishment and Cooperation in Groups: Experimental Field Evidence from Commons Management in Ethiopia," American Economic Review, American Economic Association, vol. 105(2), pages 747-783, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 133(4), pages 1645-1692.
    2. Thomas Dohmen & Benjamin Enke & Armin Falk & David Huffman & Uwe Sunde, 2016. "Patience and the Wealth of Nations," Working Papers 2016-012, Human Capital and Economic Opportunity Working Group.
    3. Assaf Sarid & Oded Galor, "undated". "Geographical Origins and Economic Consequences of Language Structures," Working Papers WP2017/4, University of Haifa, Department of Economics.
    4. Oded Galor & Omer Ozak & Assaf Sarid, 2016. "Origins and Consequences of Lanquage Structures," Working Papers 2016-7, Brown University, Department of Economics.
    5. Armin Falk & Fabian Kosse & Pia Pinger & Hannah Schildberg-Hörisch & Thomas Deckers, 2021. "Socioeconomic Status and Inequalities in Children’s IQ and Economic Preferences," Journal of Political Economy, University of Chicago Press, vol. 129(9), pages 2504-2545.
    6. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120, Elsevier.
    7. Anke Becker & Benjamin Enke & Armin Falk, 2020. "Ancient Origins of the Global Variation in Economic Preferences," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 319-323, May.
    8. Ranoua Bouchouicha & Ferdinand M. Vieider, 2019. "Growth, entrepreneurship, and risk-tolerance: a risk-income paradox," Journal of Economic Growth, Springer, vol. 24(3), pages 257-282, September.
    9. Oded Galor & Ömer Özak & Assaf Sarid, 2018. "Geographical Origins of Language Structures," Departmental Working Papers 1801, Southern Methodist University, Department of Economics.
    10. Armin Falk & Fabian Kosse & Pia Pinger & Hannah Schildberg-Hörisch & Thomas Deckers, 2021. "Socioeconomic Status and Inequalities in Children’s IQ and Economic Preferences," Journal of Political Economy, University of Chicago Press, vol. 129(9), pages 2504-2545.
    11. Sun-Ki Chai & Dolgorsuren Dorj & Katerina Sherstyuk, 2018. "Cultural Values and Behavior in Dictator, Ultimatum, and Trust Games: An Experimental Study," Research in Experimental Economics, in: Anna Gunnthorsdottir & Douglas A. Norton (ed.), Experimental Economics and Culture, volume 20, pages 89-166, Emerald Publishing Ltd.
    12. Oded Galor & Ömer Özak, 2016. "The Agricultural Origins of Time Preference," American Economic Review, American Economic Association, vol. 106(10), pages 3064-3103, October.
    13. Dániel Horn & Hubert János Kiss, 2020. "Time preferences and their life outcome correlates: Evidence from a representative survey," PLOS ONE, Public Library of Science, vol. 15(7), pages 1-26, July.
    14. Daniel Horn & Hubert Kiss Janos, 2020. "Do individuals with children value the future more?," CERS-IE WORKING PAPERS 2010, Institute of Economics, Centre for Economic and Regional Studies.
    15. Menkhoff, Lukas & Sakha, Sahra, 2017. "Estimating risky behavior with multiple-item risk measures," Journal of Economic Psychology, Elsevier, vol. 59(C), pages 59-86.
    16. Galizzi, Matteo M. & Machado, Sara R. & Miniaci, Raffaele, 2016. "Temporal stability, cross-validity, and external validity of risk preferences measures: experimental evidence from a UK representative sample," LSE Research Online Documents on Economics 67554, London School of Economics and Political Science, LSE Library.
    17. Hardardottir, Hjördis, 2016. "Long Term Stability of Time Preferences and the Role of the Macroeconomic Situation," Working Papers 2016:5, Lund University, Department of Economics, revised 29 Aug 2016.
    18. Litina, Anastasia, 2012. "Unfavorable land endowment, cooperation, and reversal of fortune," MPRA Paper 39702, University Library of Munich, Germany.
    19. Victor Ginsburgh & Shlomo Weber, 2020. "The Economics of Language," Journal of Economic Literature, American Economic Association, vol. 58(2), pages 348-404, June.
    20. Anastasia Litina, 2016. "Natural land productivity, cooperation and comparative development," Journal of Economic Growth, Springer, vol. 21(4), pages 351-408, December.

    More about this item

    Keywords

    economic preferences; cultural variations;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • F00 - International Economics - - General - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hka:wpaper:2016-004. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/mfichus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jennifer Pachon (email available below). General contact details of provider: https://edirc.repec.org/data/mfichus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.