Feb 20, 2013

Language and economic behavior

I twitted this Keith Chen TED-talk recently. The paper is here (December 2012). The abstract:
Languages differ widely in the ways they encode time. I test the hypothesis that languages that grammatically associate the future and the present, foster future-oriented behavior. This prediction arises naturally when well-documented effects of language structure are merged with models of intertemporal choice. Empirically, I find that speakers of such languages: save more, retire with more wealth, smoke less, practice safer sex, and are less obese. This holds both across countries and within countries when comparing demographically similar native households. The evidence does not support the most obvious forms of common causation. I discuss implications for theories of intertemporal choice.

FTR stands for Future Time Reference
The title of the paper is "The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets." It is forthcoming in the AER.
There is a lot of fresh air in that type of research.

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