CULTURED MINDS
An Investigation of How Culture Affects Decision Making
VALUE OVER TIME
In studying object valuations over time (Levinson & Peng, 2007) uncovered large variation in estimates of financial value across Chinese and US participants. In their studies participants were given the value of an object (a gold ring, antique chair, commemorative coins, and a municipal bond) ~30 years ago (the 1985 price) and asked to value the object in today’s prices.
Even accounting for the different inflation rates in both countries, Chinese participants valued all objects significantly higher than US participants. For example, Americans estimated that the chair’s value increased by near 6% per year while Chinese estimated that the chair value increased by 14+% per year. There was also a systematic cultural difference in which object was thought to gain the most value over time. Americans judged the bond as the highest appreciating object since 1985 while the Chinese judged it as the lowest appreciating object. However, on average all thought the gold ring appreciated more than the coins, which in turn appreciated more than the antique chair.
