According to a report published in the Journal of Political Economy, a child's economic choices are passed on from the parents or the family traditions, as every child starts taking their first lesson from them.
In terms of social preferences, less than 10% of the parents and children are altruistic, less than 10% of the mothers, more than 20% of the fathers, and about 17% of children are egalitarian.
In addition, according to the report, about 20% of the parents and children are “spiteful”, and about one-third of both parents and children are “selfish”.
A recent research paper, titled “Economic preferences across generations and family clusters: A large‐scale experiment in a developing country” published all these statistics.
At a press conference held at the Bangladesh Institute of Development Studies (BIDS) conference room, Shyamal Chowdhury, professor at the School of Economics, University of Sydney; Matthias Sutter, professor at Max Planck Institute for Research on Collective Goods Bonn and Klaus F Zimmermann, professor at Maastricht University, UNU‐MERIT, CEPR and GLO disclosed their research findings.
Their paper has been accepted for publication in the Journal of Political Economy, published by the University of Chicago, which is one of the oldest and most prestigious journals in economics.
In his keynote paper presentation, Shyamal Chowdhury said: “The descriptive evidence does not show any noticeable difference in the economic preferences between boys and girls. However, women are more patient than men but are also more self-centred than men on average. In contrast, men are slightly more altruistic and more egalitarian than women.”
“In their empirical analysis, we have seen that husbands’ and wives’ preferences are significantly and positively correlated to each other most of the time. Despite controlling for a large number of background variables, including socioeconomic status, cognitive abilities and personality traits, there is a positive and significant relationship between a wife’s preference to her husband’s preference and vice versa.”
“Given that marriages in rural Bangladesh are in an overwhelming majority of cases arranged by the bride’s and the groom’s families, it is, therefore, not straightforward to expect similar preferences of husbands and wives. Post‐marriage convergence is most likely not the main factor, but rather that the families of bride and groom seem to look for a match that includes similarities in economic preferences,” he added.
In contrast to that, they examined the correlations between parents' and children’s preferences and find that the parents’ economic preferences are related to their children’s preferences to a similar degree.
The researchers found that the relationship to the child’s preferences is practically the same for mothers and for fathers (with one exception).
This is noteworthy because mothers spend much more time at home than fathers, for which one could expect mothers to have a tighter relationship if spending time would predominantly shape relationships, but it's not the case as mothers have a stronger relationship with daughters and fathers with their sons, with respect to their economic preferences.
In addition, the authors have studied the relationships of different economic preferences among individuals. They have found that within individuals, their measures for three different domains of economic preferences are related in a consistent manner for husbands, wives, and children.
More patient individuals are typically more risk-tolerant and both these risk and time preferences are also related to social preferences.
Spiteful subjects are less patient and risk-averse. The analysis allows us to classify families into two distinct clusters: Cluster 1‐families are significantly more patient, more risk-taking, less often spiteful, and more often altruistic while in cluster 2‐ families are more impatient, risk-averse and in particular often spiteful.
These three authors present results from an experiment with 542 families drawn from four districts in Bangladesh, where they elicited the economic preferences of 542 pairs of husbands and wives, and of their 907 children, yielding a total of 1,991 individuals as experimental participants.
They measured three dimensions of economic preferences – time, risk and social preferences – in a unified and incentivized context, allowing them to examine them at the individual and family level.
Besides the experimental elicitation of economic preferences, they have a rich set of additional controls, such as personality traits, and socio‐demographic background data.
Based on this data, they provided a 360‐degree perspective on economic preferences within families.