Preferences along the slope: Disentangling the role of climate and culture – Susann Adloff

Speaker

Susann Adloff (Kiel Institut)

Abstract

Economic preference are strongly heterogeneous across the globe. This paper adds to the study of the causes of this variation, using a novel and unique setting allowing to disentangle the roles of culture and climate on preference formation. In particular, we use data from the southern slope of Mount Kilimanjaro which exhibits a steep continuous gradient of ecological variation vis a vis minimal socio-political heterogeneity across space and time. Matching data on economic preferences from 14 villages with data on climatic conditions between 1982 - 2011, we are able to identify long-term effects of environmental conditions on economic preferences. Using this data from a continuous climate gradient, we corroborate previous findings from the literature regarding patience and risk tolerance: Patience is significantly higher in regions in which the climatic baseline conditions are suitable for agricultural activity and a higher exposure to climatic shocks in the climatic baseline fosters risk tolerance. Notably, our finding for risk tolerance does not extent to comparably milder climatic uncertainty in terms of precipitation and temperature variability. Instead, we find negative effects of mild environmental uncertainty on risk tolerance. Finally, we find no robust clear cut role of climatic baseline conditions on prosociality variables in our dataset. 

Authors

Susann Adloff (Kiel Institut) — Ulrich Schmidt (Kiel Institut; University of Kiel (CAU))

Room

Media Room (A-211)