February 2024

IZA DP No. 16834: Do Economic Preferences of Children Predict Behavior?

We use novel data on nearly 6,000 children and adolescents aged 6 to 16 that combine incentivized measures of social, time, and risk preferences with rich information on child behavior and family environment to study whether children's economic preferences predict their behavior. Results from standard regression specifications demonstrate the predictive power of children's preferences for their prosociality, educational achievement, risky behaviors, emotional health, and behavioral problems. In a second step, we add information on a family's socio-economic status, family structure, religion, parental preferences and IQ, and parenting style to capture household environment. As a result, the predictive power of preferences for behavior attenuates. We discuss implications of our findings for research on the formation of children's preferences and behavior.