Evaluating Intergenerational Persistence of Economic Preferences: A Large Scale Experiment with Families in Bangladesh

93 Pages Posted: 25 Feb 2018

See all articles by Shyamal Chowdhury

Shyamal Chowdhury

The University of Sydney

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Cologne - Department of Economics

Klaus F. Zimmermann

Harvard University; German Institute for Economic Research (DIW Berlin); University of Bonn; Centre for Economic Policy Research (CEPR)

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Abstract

Economic preferences – like time, risk and social preferences – have been shown to be very influential for real-life outcomes, such as educational achievements, labor market outcomes, or health status. We contribute to the recent literature that has examined how and when economic preferences are formed, putting particular emphasis on the role of intergenerational transmission of economic preferences within families. Our paper is the first to run incentivized experiments with fathers and mothers and their children by drawing on a unique dataset of 1,999 members of Bangladeshi families, including 911 children, aged 6-17 years, and 544 pairs of mothers and fathers.We find a large degree of intergenerational persistence as the economic preferences of mothers and fathers are significantly positively related to their children's economic preferences. Importantly, we find that socio-economic status of a family has no explanatory power as soon as we control for parents' economic preferences. A series of robustness checks deals with the role of older siblings, the similarity of parental preferences, and the average preferences within a child's village.

Keywords: intergenerational transmission of preferences, time preferences, risk preferences, social preferences, children, parents, Bangladesh, socio-economic status, experiment

JEL Classification: C90, D1, D90, D81, D64, J13, J24, J62

Suggested Citation

Chowdhury, Shyamal and Sutter, Matthias and Zimmermann, Klaus F., Evaluating Intergenerational Persistence of Economic Preferences: A Large Scale Experiment with Families in Bangladesh. IZA Discussion Paper No. 11337. Available at SSRN: https://ssrn.com/abstract=3129281

Shyamal Chowdhury (Contact Author)

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006
Australia

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Cologne - Department of Economics

Cologne, 50923
Germany

Klaus F. Zimmermann

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

German Institute for Economic Research (DIW Berlin)

Mohrenstraße 58
Berlin, 10117
Germany

University of Bonn

Postfach 2220
Bonn, D-53012
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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