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The Agricultural Origins of Time Preference

Author

Listed:
  • Oded Galor
  • Omer Ozak
Abstract
This research explores the origins of the distribution of time preference across regions. It advances the hypothesis, and establishes empirically, that geographical variations in the incentives to delay consumption in favor of lucrative investment opportunities have had a persistent effect on the distribution of long-term orientation across societies. In particular, exploiting a natural experiment associated with the Columbian Exchange, the research establishes that agro-climatic characteristics in the pre-industrial era that were conducive to higher return to agricultural investment, triggered selection and learning processes that had a persistent positive effect on the prevalence of long-term orientation in the contemporary era.

Suggested Citation

  • Oded Galor & Omer Ozak, 2014. "The Agricultural Origins of Time Preference," Working Papers 2014-5, Brown University, Department of Economics.
    • Handle: RePEc:bro:econwp:2014-5
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    More about this item

    Keywords

    Time preference; Delayed Gratiffcation; Culture; Agriculture; Economic Development; Evolution;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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