This paper shows that personality traits are affected by random negative economic shocks experienced during formative stages of the life-cycle. Combining individual panel data with rain-fall variations during the growing season in Ethiopia, we find that past droughts experienced during adolescence have a persistent effect on adulthood self-esteem, lowering self-esteem by approximately 0.2 standard deviations. Additionally, recent drought lowers self-esteem by approximately 0.3 standard deviations, illustrating a contemporaneous component of self-esteem. We also find that parental self-esteem is correlated with that of their children. Results emphasise that economic adversity experienced during formative years of behavioural development has a persistent effect, which may then be transmitted across generations. We lastly observe that individuals who have faced such a shock during their adolescence and late childhood accumulate less assets as adult.
About the speaker
Salvatore is a Professor of Economics. His research focuses on the intersection between agricultural, environmental and development economics using econometric models. He has analyzed the contribution of natural resources such as biodiversity on agricultural productivity, food security, and weather risk in arid environments. His work also focuses on the role of institutional structures (common property forests) on natural resource conservation, rural development and poverty reduction. More recent work includes the impact of social capital and traditional sharing norms on consumption, saving accumulation, investment decisions and adaptation to climate change. He is currently editor of the European Review of Agricultural Economics.
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Date: 11 June 2020
Time: 12:00 - 13:00