Do Economic Preferences of Children Predict Behavior?

Abstract

We use novel data on nearly 6,000 children and adolescents aged 6 to 16 that combine incen-tivized measures of social, time, and risk preferences with rich information on child behavior and family environment to study whether children’s economic preferences predict their behavior. Re-sults from standard regression specifications demonstrate the predictive power of children’s pref-erences for their prosociality, educational achievement, risky behaviors, emotional health, and behavioral problems. In a second step, we add information on a family’s socio-economic status, family structure, religion, parental preferences and IQ, and parenting style to capture household environment. As a result, the predictive power of preferences for behavior attenuates. We discuss implications of our findings for research on the formation of children’s preferences and behavior.

Keywords: social preferences, time preferences, risk preferences, experiments with children, origins of preferences, human capital, behavior

JEL Classification: C910, D010