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The cultural origin of saving behavior.
Joan Costa-Font1, Paola Giuliano2,3, Berkay Ozcan4
1Department of Health Policy, London School of Economics, London, United Kingdom.
Plos One
|September 13, 2018
Summary
Cultural social norms significantly influence saving rates across countries. This effect persists for up to three generations of immigrants, challenging traditional economic views.
Area of Science:
- Behavioral Economics
- Sociology
- Cultural Studies
Background:
- Traditional economic models fail to explain cross-country saving rate disparities.
- Existing economic consensus dismisses culture's impact on savings behavior.
Purpose of the Study:
- To investigate the role of cultural social norms in explaining international differences in saving rates.
- To analyze the persistence of cultural influences on savings across multiple generations.
Main Methods:
- Utilized a novel dataset tracking the saving behavior of immigrants in the United Kingdom.
- Examined savings patterns across up to three generations of immigrant families.
Main Results:
- Found significant evidence that cultural preferences explain cross-country variations in saving behavior.
- Demonstrated that the influence of cultural norms on savings persists up to the third generation.
Conclusions:
- Cultural social norms are a crucial determinant of saving behavior, extending beyond initial migration.
- Revises the economic perspective by highlighting the enduring impact of culture on financial decisions.
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