Economic Preferences Across Generations and Family Clusters: A Large-Scale Experiment

130 Pages Posted: 29 Jul 2020

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

Global Labor Organization (GLO); UNU-MERIT; Maastricht University, Department of Economics; Free University Berlin; University of Bonn; Centre for Economic Policy Research (CEPR); Journal of Population Economics

Multiple version iconThere are 3 versions of this paper

Date Written: July 2, 2020

Abstract

Economic preferences are important for lifetime outcomes such as educational achievements, health status, or labour market success. We present a holistic view of how economic preferences are related within families. In an experiment with 544 families (and 1,999 individuals) from rural Bangladesh we find a large degree of intergenerational persistence of economic preferences. Both mothers’ and fathers’ risk, time and social preferences are significantly (and largely to the same degree) positively correlated with their children’s economic preferences, even when controlling for personality traits and socio-economic background data. We discuss possible transmission channels for these relationships within families and find indications that there is more than pure genetics at work. Moving beyond an individual level analysis, we are the first to classify a whole family into one of two clusters, with either relatively patient, risk-tolerant and pro-social members or relatively impatient, risk averse and spiteful members. Socio-economic background variables correlate with the cluster to which a family belongs to.

Keywords: Economic preferences within families, intergenerational transmission of preferences, time preferences, risk preferences, social preferences, family clusters, socio-economic status, Bangladesh, experiment

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

Suggested Citation

Chowdhury, Shyamal and Sutter, Matthias and Zimmermann, Klaus F., Economic Preferences Across Generations and Family Clusters: A Large-Scale Experiment (July 2, 2020). Available at SSRN: https://ssrn.com/abstract=3642651 or http://dx.doi.org/10.2139/ssrn.3642651

Shyamal Chowdhury

The University of Sydney ( email )

University of Sydney
Sydney, 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 F. Zimmermann

Global Labor Organization (GLO) ( email )

Bonn
Germany

HOME PAGE: http://https://glabor.org/

UNU-MERIT ( email )

Keizer Karelplein 19
Maastricht, 6211TC
Netherlands

Maastricht University, Department of Economics ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

University of Bonn

Postfach 2220
Bonn, D-53012
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Journal of Population Economics

Tiergartenstr. 17
D-69121 Heidelberg
Germany

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