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Cultural values, genes and savings behavior in China

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  • Chan, Kenneth S.
  • Lai, Jennifer Te
  • Li, Tingting

Abstract

This paper tests the influence of a Collectivist culture on savings behavior using China's household panel data. Researchers argue that households under a Collectivist culture save more than those under the Individualist culture. China is a large country with different ethnicities and cultures. Geographically, there are rice growing, wheat growing and herding provinces. The rice growing regions require more cooperative effort (collectivism) among farmers for irrigation etc., than others (Henrich, 2014; Talhelm et al., 2014). Another explanatory variable is the genetic diversity (large genetic distances) among the peoples within a community (Ashraf & Galor, 2013), which impedes solidarity and consequently less savings. We find that the Geography variable (measured by rice farming) offers a stronger prediction than the Genetic variable.

Suggested Citation

  • Chan, Kenneth S. & Lai, Jennifer Te & Li, Tingting, 2022. "Cultural values, genes and savings behavior in China," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 134-146.
    • Handle: RePEc:eee:reveco:v:80:y:2022:i:c:p:134-146
    DOI: 10.1016/j.iref.2022.02.009
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    References listed on IDEAS

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    1. Enrico Spolaore & Romain Wacziarg, 2009. "The Diffusion of Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 469-529.
    2. Quamrul Ashraf & Oded Galor, 2008. "Human Genetic Diversity and Comparative Economic Development," 2008 Meeting Papers 617, Society for Economic Dynamics.
    3. Chan, Kenneth S. & Dang, Vinh Q.T. & Li, Tingting, 2018. "Genetic diversity and economic development: Evidence from Chinese provinces," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 50-62.
    4. Horag Choi & Steven Lugauer & Nelson C. Mark, 2017. "Precautionary Saving of Chinese and U.S. Households," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(4), pages 635-661, June.
    5. Yuriy Gorodnichenko & Gerard Roland, 2017. "Culture, Institutions, and the Wealth of Nations," The Review of Economics and Statistics, MIT Press, vol. 99(3), pages 402-416, July.
    6. Louis Putterman & David N. Weil, 2010. "Post-1500 Population Flows and The Long-Run Determinants of Economic Growth and Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(4), pages 1627-1682.
    7. Srivisal, Narapong & Sanoran, Kanyarat Lek & Bukkavesa, Kanix, 2021. "National culture and saving: How collectivism, uncertainty avoidance, and future orientation play roles," Global Finance Journal, Elsevier, vol. 50(C).
    8. Quamrul Ashraf & Oded Galor, 2013. "The 'Out of Africa' Hypothesis, Human Genetic Diversity, and Comparative Economic Development," American Economic Review, American Economic Association, vol. 103(1), pages 1-46, February.
    9. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    10. Bradley L Kirkman & Kevin B Lowe & Cristina B Gibson, 2006. "A quarter century of Culture's Consequences: a review of empirical research incorporating Hofstede's cultural values framework," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(3), pages 285-320, May.
    11. Chan, Kenneth S. & Lai, Jennifer T. & Yan, Isabel K.M., 2014. "Consumption risk sharing and self-insurance across provinces in China: 1952–2008," China Economic Review, Elsevier, vol. 30(C), pages 66-85.
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    More about this item

    Keywords

    Collectivism; Culture; Genetic diversity; Savings;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Z1 - Other Special Topics - - Cultural Economics

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