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Economic preferences across generations and family clusters: A large-scale experiment

Author

Listed:
  • Zimmermann, Klaus F.
  • Chowdhury, Shyamal
  • Sutter, Matthias
Abstract
Economic preferences are important for lifetime outcomes such as educational achievements, health status, or labor 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.

Suggested Citation

  • Zimmermann, Klaus F. & Chowdhury, Shyamal & Sutter, Matthias, 2020. "Economic preferences across generations and family clusters: A large-scale experiment," CEPR Discussion Papers 14998, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14998
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    Cited by:

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    3. Thijs Brouwer & Fabio Galeotti & Marie Claire Villeval, 2023. "Teaching Norms: Direct Evidence of Parental Transmission," The Economic Journal, Royal Economic Society, vol. 133(650), pages 872-887.

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    More about this item

    Keywords

    Economic preferences within families; Intergenerational transmission of preferences; Time preferences; Risk preferences; Social preferences; Family clusters; Socio-economic status; Bangladesh; Experiment;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D1 - Microeconomics - - Household Behavior
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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