How much risk you're willing to take with money might depend on how much it rained where your ancestors lived hundreds of years ago.
March 26, 2026
Original Paper
Seeds of Caution: Historical Climate Volatility and the Origins of Risk Aversion
SSRN · 6468392
The Takeaway
By linking centuries of paleoclimatic data with modern surveys, researchers found that people from regions that experienced high rainfall volatility in the pre-industrial era are significantly more risk-averse today. This suggests that the 'trauma' of historical crop failures created cultural norms of caution that have been passed down through generations, persisting long after the invention of modern agriculture and irrigation.
From the abstract
Why are some populations more risk-averse than others? This paper investigates the deep historical origins of risk preferences, proposing that prolonged exposure to climate fluctuations in the pre-industrial era heightened economic uncertainty and fostered risk-averse behavioral norms that persist to the present. Combining reconstructed paleoclimatic data spanning several centuries with contemporary individual-level survey data from China, I show that regions with greater pre-industrial rainfall