The effect of the social environment during childhood on preferences in adulthood

Title: The effect of the social environment during childhood on preferences in adulthood (with Toke Fosgaard and Lars Hansen)

Abstract: Preferences are key for shaping decision-making, yet it remains an open question where preferences originate from. We investigate the causal effect of the childhood social environment on adults’ preferences. We utilize a natural experiment in Denmark, which randomized refugees to different neighbourhoods in the 1990s. We experimentally measure risk, time, and social preferences of adult refugees who were children at the time of arrival in Denmark. Using rich administrative register data on the entire Danish population, we can measure a very broad range of aspects of the childhood social environment. We find that the randomly allocated childhood environment significantly affects adults' preferences, in particular, patience.