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

ZEF-Discussion Papers on Development Policy No. 250

94 Pages Posted: 24 Apr 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 Zimmermann

Princeton University

Multiple version iconThere are 4 versions of this paper

Date Written: March 2018

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, Evaluating Intergenerational Persistence of Economic Preferences: A Large Scale Experiment with Families in Bangladesh (March 2018). ZEF-Discussion Papers on Development Policy No. 250. Available at SSRN: https://ssrn.com/abstract=3156943 or http://dx.doi.org/10.2139/ssrn.3156943

Shyamal Chowdhury

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006
Australia

Matthias Sutter (Contact Author)

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 Zimmermann

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

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