Tastes, castes, and culture: The influence of society on preferences

Tastes, Castes, and Culture:
The Influence of Society on Preferences

Ernst Fehr^a) and Karla Hoff^b)

August 8 2011

Abstract: Economists have traditionally treated preferences as exogenously given.
Preferences are assumed to be influenced by neither beliefs nor the constraints
people face. As a consequence, changes in behaviour are explained exclusively in
terms of changes in the set of feasible alternatives. Here we argue that the
opposition to explaining behavioural changes in terms of preference changes is ill-
founded, that the psychological properties of preferences render them susceptible
to direct social influences, and that the impact of “society” on preferences is likely
to have important economic and social consequences.

Running short title: The Influence of Society on Preferences

Key words: endogenous preferences, culture, caste, frames, anchors, elicitation devices

JEL classification: A12, A13, D01, K0

*⁾ This paper is part of the Research Priority Program on the “Foundations of Human Social Behavior—Altruism vs.
Egoism” at the University of Zurich.

^a) Ernst Fehr, Department of Economics, Laboratory for Social and Neural Systems Research, University of Zurich,
Blümlisalpstrasse 10, CH-8006 Zurich, Switzerland, email: [email protected]

b) Karla Hoff, World Bank, email: [email protected]

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