Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/176936
Authors: 
Galor, Oded
Savitskiy, Viacheslav
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 6917
Abstract: 
This research explores the origins of loss aversion and the variation in its prevalence across regions, nations and ethnic group. It advances the hypothesis and establishes empirically that the evolution of loss aversion in the course of human history can be traced to the adaptation of individuals to the asymmetric effects of climatic shocks on reproductive success during the Malthusian epoch. Exploiting variations in the degree of loss aversion among second generation migrants in Europe and the US, as well as across precolonial ethnic groups, the research establishes that consistent with the predictions of the theory, individuals and ethnic groups that are originated in regions in which climatic conditions tended to be spatially correlated, and thus shocks were aggregate in nature, are characterized by greater intensity of loss aversion, while descendants of regions marked by climatic volatility have greater propensity towards loss-neutrality.
Subjects: 
loss aversion
cultural evolution
evolution of preferences
natural selection
Malthusian epoch
growth
development
JEL: 
D81
D91
Z10
O10
O40
Document Type: 
Working Paper

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