The effect of language on saving behavior

• Main Author: Garcia, Emmanuel M.
• Format: text
• Language: English
• Published: Animo Repository 2015
• Subjects: Economics
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/5107
• Institution: De La Salle University

The Sapir-Whorf hypothesis, the claim that the structure of language itself affects cognition among native speakers, remains most controversial. In 2013, Chen produced possibly the first direct evidence within Economics that future-oriented behaviour (e.g., saving) is stronger among speakers of so-called Weak Future Time Reference languages whose grammar does not distinguish between present and future. Using World Values Survey data for 76 countries, he estimated a fixed-effects logit model with increasingly restrictive group controls and showed that weak FTR languages neutralise present and future mentally, reducing individual discount rates and making future-oriented behaviour more desirable. Following Chen, we estimate a similar model for WVS Wave 6 to test whether speakers of Cebuano (Weak FTR) are more likely to save than speakers of Tagalog (Strong FTR). It turns out they are: 37% more for cash savings and 52% for non-cash savings, all things equal.