Social Preferences and Environmental Quality: Evidence from School Children in Sierra Leone

This article examines the effect of exogenous health shocks in utero and in infancy on the development of social preferences later in childhood. We use data from binary-choice dictator games run with school children in rural Sierra Leone to measure aversion to inequality, altruism and spite towards peers within and outside one's social group. We exploit shocks in the level of rainfall in the place and year of children's birth as sources of variation in the environment at the time children are born. We find that being born into an environment with higher rainfall, which is associated with worse health outcomes, lowers the probability that a child will demonstrate a propensity to maximise her own material pay-off. We show that rainfall shocks are linked to children's height-for-age and suggest that they influence preferences through their effect on children's health. Whether the relationship is a direct one from health to physical and cognitive development, or an indirect one through parents' socialisation, our results suggest that preferences are shaped by features of the physical environment in which individuals are born.