How Are Economic Preferences Formed in Early Life and Adolescence?

Economic preferences that relate to time (patience), risk taking and social interaction have been shown to play an important role in life success. In this video, MATTHIAS SUTTER explores how these economic preferences are formed in early life and adolescence. Carrying out economic experiments and collecting survey data among 500 families in rural Bangladesh, Sutter finds that children adopt almost entirely the economic preferences of their parents. Sutter also shows that factors like higher income and coming from a larger household can help to form these economic preferences in a more advantageous manner. Highlighting that genetics alone cannot explain differences in economic preferences, Sutter’s work provides important information for governments seeking to intervene to improve life chances.

DOI:

https://doi.org/10.21036/LTPUB101050

Researcher

Professor Matthias Sutter is a Director of the Max Planck Institute for Research on Collective Goods in Bonn. Holding professorships in Economics at the Universities of Cologne and Innsbruck, Sutter is also a research affiliate of the Reinhart Selten Institute (RSI) and a research fellow of the IZA. Having previously worked at the University of Gothenburg and the European University Institute, Sutter’s research focuses on experimental economics. An editor of numerous journals including Management Science and the European Economic Review and a member of the Scientific Board of the Kiel Institute for the World Economy, Sutter’s book "Die Entdeckung der Geduld" has been published in two editions (2014; 2018), was a bestseller in Austria and has been translated into Turkish (2017) and Mandarin Chinese (2016).

Max Planck Institute for Research on Collective Goods

Initially founded as a Max Planck institute that investigates the provision of collective goods, the institute has developed into an international hub that focuses in its research mainly on applied economics and on behavioral law. Moreover, the institute hosts three independent research groups on “moral courage”, “economic cognition”, and “mechanisms of normative change”. The set of researchers from various disciplines, such as economics, law, psychology, and sociology, constitutes a truly interdisciplinary environment that facilitates a cross-fertilization of ideas.

Original Publication

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

Shyamal Chowdhury

Matthias Sutter

Klaus F. Zimmermann

Published in 2020