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

Author

Listed:
  • Johannes Abeler

    (Department of Economics, University of Oxford)

  • Toke Reinholt Fosgaard

    (Department of Food and Resource Economics, University of Copenhagen
    Department of Technology, Management and Economics, Technical University of Denmark)

  • Lars Garn Hansen

    (Department of Food and Resource Economics, University of Copenhagen)

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.

Suggested Citation

  • Johannes Abeler & Toke Reinholt Fosgaard & Lars Garn Hansen, 2023. "The effect of the social environment during childhood on preferences in adulthood," IFRO Working Paper 2023/03, University of Copenhagen, Department of Food and Resource Economics.
    • Handle: RePEc:foi:wpaper:2023_03
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    File URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2023/IFRO_WP_2023_03.pdf
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    More about this item

    Keywords

    Preference formation; natural experiment; register data;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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