The impact of language on economic behavior | Keith Chen | TEDxYale

Keith Chen is an Associate Professor of Economics at the Yale School of Management. His research blurs traditional boundaries in both subject and methodology, bringing unorthodox tools to bear on problems at the intersection of Economics, Psychology, and Biology. Professor Chen's most recent work focuses on how people's economic choices and attitudes are influenced by their language.

This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx

Thank you very much.

So in the spirit
of this afternoon's conference,

I want to take this opportunity

to talk with you a little bit
about some new work I'm doing

and how it all started -

because I saw a map
that really freaked me out.

Let me show you that map

and give you a little bit of background.

Just to start things off and explain,

I'm a behavioral economist here at Yale.

And so, one of the things I study
is how people make decisions over time:

So, how people think about the future

and how people think about the future
that influences their behavior

with respect to saving,
with respect to studying for your exams,

with respect to sticking to a diet,
with respect to quitting smoking.

Now, what about this map
freaked me out in particular?

So let me just say this was a map

that was released
by the European Science Foundation

in the late 1990s.

And in particular what freaked me out
was this area in blue.

Let me put it on a different map
so it's a little bit easier to recognize.

What this is is a map of Northern Europe.

And what really, really
kind of threw me for a curve

was that the European Science Foundation
had released a report

that a number of kind of very, very
reputable researchers

had claimed that all of the areas
inside this blue region

were utterly and totally futureless.

(Laughter)

That's something
of an extreme statement.

So I mean, as an economist,
I'm someone used to, for example,

making predictions that go horribly awry,

but this almost takes the cake.

You know, perhaps
with the exception of Iceland -

you can think about current
European financial crisis -

and the other areas inside this blue area

actually are almost perfectly
the countries that are doing the best.

And as an economist,

what I would say is it seems crazy
to call these places futureless.

I mean, these places
are all full of countries

that are saving a tremendous
amount of money,

households that are saving
a tremendous amount of money,

countries that don't have
problems with their bonds

and are investing a tremendous amount
in public infrastructure

and in the future -

they just seem to care a lot
about the future.

What I realized that led
to this confusion, though,

is that the team of researchers
at the European Science Foundation

led by kind of a superstar
named Austin Dole,

they weren't talking about
what an economist would mean

when they say that a place is futureless,

because this was a team of linguists,

and what they were saying
was that, in fact,

not that the households in this region
don't kind of care about the future,

but that the languages in this region
don't really talk about the future

in the same way that languages
outside this area talk.

And what that led me to think about -

which I'm going to tell you
a little bit about right now -

is the connection between economics,
how you feel about the future

and how your language forces you
to talk about the future.

Okay. Let me explain a little bit
about what that means.

So, for example - you can probably tell -

I'm Chinese,

and, you know, growing up I realized

that Chinese families are different
in many interesting ways.

What's a little bit subtle -

and that I didn't realize
till much later -

is that the Chinese language
actually forces Chinese speakers

to talk about families
in subtly different ways.

So let me give you an example.

Suppose that a bunch of your friends
come to you and say,

"Would you like to go out for dinner?"

If you were speaking English
with your friends,

you could say, "You know,
that sounds great.

I'm really, really sorry, though,
I have an uncle in town,

and tomorrow I'm going
to go out to dinner with him."

Now, if you were speaking Chinese
to your friends instead,

actually, Chinese the language

would force you to include
a lot more information

that I didn't just say.

So, for example, there is
no general word for uncle in Chinese;

instead, what you'd have to specify,

what you'd be forced
by your language to tell your friends

is whether this was an uncle
on your mother's side of the family

or your father's side of the family,

and in fact, you'd be forced to say

whether or not this was an uncle
by birth or by marriage.

So, this is actually a very, very
fundamental characteristic of language.

And as you see up there,

the linguist Roman Jakobson
expressed this best

when he said, "Languages differ
essentially in what they must convey

and not in what they may convey."

So in this sense, Chinese is forcing you

to say a lot to your friends
about the structure of your family

in ways that if you're an English speaker,

you could very well think,
"Well, they don't need to know,"

or "It's none of their business."

Now, let's get back to Austin Dole
and these kind of European linguists.

What these linguists at the European
Science Foundation discovered

was that when they looked
at languages across the globe,

a lot of global languages,

what they discovered

was that languages differ
in a very, very fundamental way

in the ways they force their speakers
to talk about the future.

And they broke down languages
into two rough categorizations:

One - I'll call them "weak-FTR,"

or “weak future
time reference languages” -

are languages like Chinese,
Finish and German,

which don't force speakers,
in fact, which allow speakers

to speak about the future
basically as if it's the present.

And then other languages,
like English, Greek, Italian and Russian -

we'll call them "strong-FTR languages" -

force speakers to grammatically
realize or to speak

as if the future is something
viscerally different than the present.

So for example,
when I was just telling you

how I would talk to my friends
about taking my uncle out for dinner,

if I were to say that in Chinese,

it would be very, very kind of common
and very, very easy for me to just say,

''I can't go out to dinner tomorrow.
I eat with uncle,''

whereas to an English speaker,
that just sounds very, very strange.

Now, a lot of people
when I first showed them this list

think it's very strange

because many people in this room

probably know that English
is a Germanic language

and that English and German
are close cousins,

and yet as you can see,

English and German find themselves
on opposite ends of this divide.

Many of you probably speak German.

One way you can think
about this difference is, for example,

suppose I was going to try and predict
precipitation for tomorrow.

In German, I could very easily say
"Es regnet morgen"

or "Morgen regnet es"

or "Morgen ist es kalt,"

and that sounds weird
to an English speaker

because what I'm literally saying

is "Morning is cold"

or "Tomorrow it rain"
instead of "Tomorrow it will rain."

Now, can this have an effect
on your behavior?

Can this have an effect on your economics?

Well, I did what, you know, economists
with a crazy idea would do,

and that is quickly
try and dispel myself of crazy ideas

by going and looking for as much data
as possible around the world

and trying to hit it as hardly as I can.

And let me just summarize
the hypothesis that I was testing for you;

that is,

can languages that lead speakers to talk
similarly about the present and the future

lead those same speakers

to feel similarly
about the present and the future?

Now, why might that be important?

Because if that's true,

then speakers of those languages
should have an easier time saving,

should have an easier time
studying for exams,

should have an easier time
kind of not overeating

and, for example, should have
an easier time quitting smoking.

Let me just say, as a broad overview,
that's basically what I find.

All of those pattern I just told you

I find in spades in every
major region of the world,

and no matter of how hard you try
and hit this data and make it go away,

you can't get this pattern to disappear.

Let's work through it a bit.

These are OECD countries
that I put up in front of you.

What does that mean?

Well, these are generally rich
kind of first world countries.

They tend to have open markets
and be liberal democracies.

We were talking a little bit
about the European financial crisis.

You can look all the way
over there on the right -

this is the average savings rate
of countries over the last 25 years -

and all the way over there
on the right is Greece, okay?

(Laughter)

Saving just a little bit over 10%
of their GDP, okay?

So, you know, that’s not such a surprise;

we know they've had
a problem with savings.

It's a little bit impolite
to mention it in this audience,

but if you noticed,
we're the United States,

and we’re next in line.

(Laughter)

Now, what I want you to notice, though -

because I've colored a number
of these bars in light blue -

those light blue bars are those countries
which speak languages

that don't make a strong distinction
between the present and the future, okay?

And according to our hypothesis,

that should make it easier to care
about the future and easier to save.

What we see is that's very true.

Now, is this only a feature
of rich countries?

Is this only a feature
of well-developed economies?

No, here's a much larger set of countries
from all over the world.

And what you see this kind
of downwardly sloping line indicates

is that exact same pattern
seems to hold, you know,

basically in every
major region of the world.

If you speak a language

that doesn't distinguish strongly
between the future and the present,

you just save a lot more, okay?

Now, something else
that this graph, well, can show you

is something which provides an opportunity

to hit this question much, much more hard.

And what is that?

Well, that is all of these countries,

these seven countries
you see in the middle of the screen,

these are countries
with multiple national languages.

And what's fortunate about that

is in many of these countries,
they have multiple national languages

and you can literally
try and find families

who live basically next door
to each other in these countries

but who speak different languages.

What is that going to allow us to do?

That's going to allow us
to look inside countries like Switzerland,

where you see people who speak German,

you see people who speak French,

you see people who speak Italian,

and you see families that speak Romansh,

and countries in totally different parts
of the world, like Nigeria,

where you'll find Hausa speakers
living right next to Yoruba speakers

living right next to Igbo speakers, okay?

What am I going to do?

Well, these are these kinds of -
no, add up won more.

You've got eight countries
around the world that have this ability.

And what I’m going to try and do

is do what epidemiologists do
and find matched pairs of families.

What does that mean?

Well, you could imagine -

suppose I was standing up here on stage
with 1.4 billion buckets, alright?

And I took each one of you,
and I sorted you into these buckets.

Based on what?

Well, based on the country that
your family was born in and is living in;

the sex and age
of the head of the household;

income - the exact income
of your household;

level of education;

marital status -

it turns out, in Europe,
there're six different ways to be married;

the number of children you find
in your household;

and finally and most powerfully,
what religion you belong to -

so 72 different world religions.

Now, that's a lot of buckets -

1.4 billion.

So, if you're lucky enough,

you might find yourself not alone

but in a bucket with, say,
one other family.

That might be lucky for you.

You have a lot to talk about,

you have a lot in common
with this family.

Lucky for me as a researcher,

every now and then, two families
find themselves in the same bucket,

but they speak languages
that treat the future differently.

So everything I'm going to tell you
from here and now is true

even when only comparing those families

that are basically
on every other dimension identical.

What do we see?

What we see is exactly what we predicted,

even after you hit the data
with that 1.4 billion buckets.

What we see is that household
that speak languages

that make a very, very weak distinction
between the present and the future

are 30% more likely
to save in any given year.

Remember that's already holding
their income constant.

They're going to, by the time they retire,
have accumulated 25% more wealth.

They're going to be 24% less likely
to report having smoked intensively.

That's like more
than a packet a day for a year

at any given point in their lives.

And, you know, not just kind
of monetary behaviors,

but think about health behaviors:

they're going to be 30% less likely
to be medically obese,

they're going to be 24%
less likely to have smoked,

and on almost every dimension,

they're going to be in measurably
better health in the long run.

So grip strength, long capacity,
walking speed, all of these measures,

you could imagine your cumulative ability
to kind of care about your future self -

eat better, exercise
and restrain from smoking.

All of those things seem to add up

even when comparing families
in the same bucket.

I'd like to leave you with this:

First of all, thank you
very much for listening.

Second of all,

this is research that's really
only just getting off the ground.

Right now, a team of linguists,
me, an economist,

and a number of psychologists here in Yale

are running experiments

to try and identify exactly
the psychological mechanisms

by which these kinds
of relationships are working.

And I invite you all to come to my website
and kind of keep up to date

with what I think is a really
exciting new project,

investigating what economists
have to learn from linguists.

Thank you very much!

(Applause) (Cheers)