Fortune favors the bold and patient: How economic freedom impacts economic preferences

Abstract We investigate the relationship between economic freedom and individual economic preferences, particularly patience and risk tolerance. While patience has been found to result in beneficial outcomes, the findings on the effects of risk tolerance are mixed. Therefore, we investigate the relationship between national levels of patience and risk taking in the presence of varying economic institutions. Our findings suggest that countries with both higher economic freedom and higher risk tolerance also exhibit greater levels of patience. Further, higher levels of risk tolerance do not equate to higher levels of patience in countries with low levels of economic freedom.