The effect of the social environment during childhood on preferences in adulthood

Johannes Abeler (), Toke Reinholt Fosgaard () and Lars Hansen
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Johannes Abeler: Department of Economics, University of Oxford
Toke Reinholt Fosgaard: Department of Food and Resource Economics, University of Copenhagen

No 2023/03, IFRO Working Paper from University of Copenhagen, Department of Food and Resource Economics

Abstract: Preferences are key for shaping decision-making, yet it remains an open question where preferences originate from. We investigate the causal effect of the childhood social environment on adults’ preferences. We utilize a natural experiment in Denmark, which randomized refugees to different neighbourhoods in the 1990s. We experimentally measure risk, time, and social preferences of adult refugees who were children at the time of arrival in Denmark. Using rich administrative register data on the entire Danish population we can measure a very broad range of aspects of the childhood social environment. We find that the randomly allocated childhood environment significantly affects adults’ preferences, in particular, patience.

Keywords: Preference formation; natural experiment; register data (search for similar items in EconPapers)
JEL-codes: C90 D15 D64 D81 D90 J62 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2023-10
New Economics Papers: this item is included in nep-eur, nep-exp and nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:foi:wpaper:2023_03

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