Willingness to play the long game, risk taking, and pro-social attitudes determine, respectively, how much people are willing to save for the future instead of spending now, if they’re ready to take risks for potential gains, and how they act with others.
These Big Three preferences have a big influence on how markets and institutions work and, in the end, shape economic growth. The disparity across countries in wealth, growth and positive societal indicators can be traced, in part, to these differing preferences.
And how much are these preferences hard-wired through born-with traits and slow-moving, sticky, cultural evolution versus adaptive and more quickly morphed by outside influences? A nature or nurture redux of sorts.
There’s a huge survey dataset (source: Global Preferences Survey) with 80,000 humans across 76 countries and every continent but the super cold one that makes a compelling case for nurture. It turns out younger people are becoming more similar across countries and cultures on the Big Three preferences – long game, risk taking, pro-social. And it’s mostly a cohort effect, not age or period effects. What’s that mean?
Pick any two decades with some separation in-between and there will be sizeable differences between the two. Consider the 1980s vs. the 2000s. The latter had broadband, e-commerce, Wi-Fi, smartphones and streaming platforms and the 80s, none of the above. And yet the 80s babies and the 90s babies both experienced the 2000s and both were changed because of it. That’s a period effect.
But it turns out that effect was more pronounced on people who experienced it at a younger age. That’s a cohort effect, they are different than others who experienced the same thing and that difference isn’t going to go away with age. If it went away with age, it’d be an age effect. Speaking of which, the risk finding reeks on the surface of age effect as it’s true people tend to become more risk averse over time. But the research accounted for this with age-effect adjustments and the finding still held.
Today’s younger people are more willing to take risks than older people were at that same age, and this isn’t going to go away as those younger people age. Same for long-term focus and pro-social attitudes.
You’ll notice there’s actually a Big Four, with Trust, also a driver of market, institutional and social progress. Here the trend reverses. What’s causing these Big Four trends?
Globalization and technology. They’re making people across the world more homogenous on attitudes that matter and on 3 of 4, in a positive direction.
What to do with this? These are general trends, they matter, they’re interesting. And we can hope they help make the world a better place – if we don’t blow it up first.
But we are constitutionally obligated to note that individual differences still dwarf these cohort adaptations. Meaning, the differences within the 50’s, 80’s or 90’s baby cohorts on what causes their giving (e.g., Identity, Personality) dwarf the fact that, on average, the 90’s babies are more pro-social than the 80’s ones.