COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 1820 The Effect of Language on Economic Behavior: M. Keith Chen August 2011 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. |
