Wednesday, March 20, 2013

Does the structure of language influence the behaviors of those within the language

From The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets by M. Keith Chen. Does the structure of language influence the behaviors of those within the language.
Languages differ in whether or not they require speakers to grammatically mark future events. For example, a German speaker predicting rain can naturally do so in the present tense, saying: Morgen regnet es which translates to ‘It rains tomorrow’. In contrast, English would require the use of a future marker like ‘will’ or ‘is going to’, as in: ‘It will rain tomorrow’.1 In this way, English requires speakers to encode a distinction between present and future events, while German does not.2 Could this characteristic of language influence speakers’ intertemporal choices?

In this paper I test a linguistic-savings hypothesis: that being required to speak in a distinct way about future events leads speakers to take fewer future-oriented actions. This hypothesis arises naturally if grammatically separating the future and the present leads speakers to disassociate the future from the present. This would make the future feel more distant, and since saving involves current costs for future rewards, would make saving harder. On the other hand, some languages grammatically equate the present and future. Those speakers would be more willing to save for a future which appears closer. Put another way, I ask whether a habit of speech which disassociates the future from the present, can cause people to devalue future rewards.
His conclusions?
Overall, my findings are largely consistent with the hypothesis that languages with obligatory future-time reference lead their speakers to engage in less future-oriented behavior. On savings, the evidence is consistent on multiple levels: at an individual’s propensity to save, to long-run effects on retirement wealth, and in national savings rates. These findings extend to health behaviors ranging from smoking to condom use, as well as to measures of long-run health. All of these results survive after comparing only individuals who are identical in numerous ways and were born and raised in the same country.

One important issue in interpreting these results is the possibility that language is not causing but rather reflecting deeper differences that drive savings behavior. These available data provide preliminary evidence that much of the measured effects I find are causal, for several reasons that I have outlined in the paper. Mainly, self-reported measures of savings as a cultural value appear to drive savings behavior, yet are completely uncorrelated with the effect of language on savings. That is to say, while both language and cultural values appear to drive savings behavior, these measured effects do not appear to interact with each other in a way you would expect if they were both markers of some common causal factor.

In addition, differences in the use of FTR do not seem to correspond to cognitive or developmental differences in the acquisition of language. This suggests that the effect of language that I measure occurs through a channel that is independent of either cultural or cognitive differences between linguistic groups.

Nevertheless, the possibility that language acts only as a powerful marker of some deeper driver of intertemporal preferences cannot be completely ruled out.

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