Final Report Summary - PREFERENCES (Understanding Preferences: Measurement, Prevalence, Determinants and Consequences)
Key economic preferences are key building blocks of any economic model and determine behavior as well as economic and social outcomes both at the individual and societal level. This project has substantially enhanced our knowledge and understanding of determinants and consequences of economic preferences. Preferences studied include risk, time and social preferences (altruism, positive and negative reciprocity). We have identified various exogenous drivers of preference heterogeneity, such as age, gender, the role of parents, and cognitive abilities. Preferences have been shown to systematically affect important outcomes such as financial decisions, migration or, at the societal level, economic growth. Methodologically the project combines lab and field experiments with large-scale survey studies, bringing together the advantages of tightly controlled environments and large-scale representative data sets. One of the main achievements is the establishment of a global preference map, i.e. an assessment of key economic preferences in 76 countries with more than 80.000 individual observations, representative for the respective country. Using this data set it is possible, for the first time, to study cross cultural differences, culturally rooted individual determinants of preferences, and to uncover the role of preferences for the economic performance of countries.