The Cultural Geography of Choice: Global Variation in Risk and Time Preferences
Becker et. al: "The Global Variation in Risk and Time Preferences" CRC Discussion Paper No. 568
Economists have long viewed risk and time preferences as the fundamental pillars of human decision-making, influencing outcomes from individual savings to national development. However, understanding how these traits vary across the globe has historically been limited by fragmented data and selective samples. In their recent synthesis, Becker and colleagues provide a comprehensive analysis of global preference heterogeneity by comparing the patterns in major international datasets and introducing the Synthetic World Aggregate Preferences (SWAP) data. Their research establishes six robust empirical regularities that emerge across diverse cultures and survey methodologies.
One of the study’s primary results is the remarkable stability of country rankings within representative samples. This suggests that measured differences across nations are not merely artifacts of survey design or cultural interpretations of specific questions; instead, they reflect genuine underlying variations in disposition. By integrating data from sources like the Global Preferences Survey and the World Values Survey to create the SWAP dataset, the authors expand the analytical scope to 116 countries, offering a more comprehensive and expansive map of global economic traits.
A significant portion of the analysis focuses on the deep-rooted determinants of these variations. The authors identify “ancestral distance” (the time elapsed since two populations shared a common ancestor) as a powerful predictor of preference divergence. Populations that branched off from one another in the distant past exhibit significantly greater differences in their willingness to take risks and patience. This suggests that preferences are deeply embedded in cultural transmission and shaped by ancestral environments, including historical climatic stability and pre-industrial agricultural yields.
On an individual level, the findings reveal consistent patterns across the globe: women are generally more risk-averse and less patient than men in the majority of countries surveyed. Additionally, willingness to take risks typically declines with age, while higher personal income correlates with both greater willingness to take risks and increased patience. At the aggregate level, national patience is strongly associated with higher GDP per capita, superior educational outcomes, and more robust democratic institutions. Notably, while wealthier individuals within a country are often more risk-tolerant, the average willingness to take risks is frequently lower in more developed nations. These findings underscore that economic preferences are central components of cultural variation, playing a vital role in shaping national socioeconomic trajectories.
Link (pdf): The Global Variation in Risk and Time Preferences
Authors from left to right: Anke Becker (Harvard Business School), Christina Borner (LMU Munich), Thomas Dohmen (University of Bonn), Armin Falk (University of Bonn), David Huffman (Cornell University), Uwe Sunde (LMU Munich)