The Impact of the Macroeconomic Environment on Social Preferences: Evidence from the Global Preference Survey

Abstract

The effect of social preferences, such as altruism and trust, on economic development is widely recognized. However, the reciprocal impact, i.e., how individuals experience the economic environment and how this shapes their social preferences, has remained largely under-explored. This study sheds light on this reciprocal effect, revealing an intriguing macroeconomic impact on individuals’ social preferences. By harnessing the Global Preference Survey data and a non-linear regression model, our findings highlight an interesting trend: there is a discernible decrease in individuals’ social preference as they experience enhanced economic conditions, and this effect is more pronounced for males. This crucial revelation underscores the importance for researchers and policymakers to take into account the prospective attenuation of social preferences in the pursuit of economic well-being.