The Nature and Predictive Power of Preferences: Global Evidence

79 Pages Posted: 29 Nov 2015

See all articles by Armin Falk

Armin Falk

briq - Institute on Behavior & Inequality

Anke Becker

Harvard University

Thomas J. Dohmen

Institute for the Study of Labor (IZA); Maastricht University - Business Investment Research Center (BIRC)

Benjamin Enke

Harvard University

David Huffman

IZA Institute of Labor Economics; Swarthmore College

Uwe Sunde

Ludwig Maximilian University of Munich - Faculty of Economics

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.

Keywords: economic preferences, cultural variation

JEL Classification: D01, D03, F00

Suggested Citation

Falk, Armin and Becker, Anke and Dohmen, Thomas and Enke, Benjamin and Huffman, David and Sunde, Uwe, The Nature and Predictive Power of Preferences: Global Evidence. IZA Discussion Paper No. 9504. Available at SSRN: https://ssrn.com/abstract=2696302

Armin Falk (Contact Author)

briq - Institute on Behavior & Inequality

Schaumburg-Lippe-Stra├če 5-9
Bonn, 53113
Germany

HOME PAGE: http://www.briq-institute.org/

Anke Becker

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Thomas Dohmen

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Maastricht University - Business Investment Research Center (BIRC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-388 3832 (Phone)
+31-43-388 4856 (Fax)

Benjamin Enke

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

David Huffman

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Swarthmore College

500 College Ave
Swarthmore, PA 19081
United States

Uwe Sunde

Ludwig Maximilian University of Munich - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

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