Paola Sapienza

Paola Sapienza works in the relatively new field of cultural economics. The Italian finance professor studies the impact of people’s cultural beliefs and preferences on economic outcomes. Her other areas of research examine gender biases in the sciences.

Interview

Does culture affect economic outcomes?

In her research, Paola Sapienza argues that immigrants are good proof of the invariance of culture. Their preferences and beliefs are formed by their country of origin, but they may live in economic conditions that are very different from the country they’re from. If culture didn’t play a role, immigrants from different countries, or immigrants and non-immigrants that live in similar economic situations, would share the same preferences and beliefs. However, Sapienza’s work shows that this is not the case.

Revealing gender biases

Paola Sapienza has conducted research on the stereotypes that impair women’s careers in the sciences. In one of her experiments, MBA students were asked to perform an arithmetic task. A male and a female student in the group were asked to stand up, and the other group members had to choose one of them to represent them and perform the arithmetic task. Participants were rewarded if they had picked the person that performed better. The result: Both male and female students in the group were twice as likely to choose a man than a woman.

Trust, social capital and finance in Italy

Trust is a key concept in many of Paola Sapienza’s papers, which the economist links back to a person’s cultural background. She points out that there are economic decisions for which the ability to trust others matters more. For example, while trust is fundamental to all trade and investment, Sapienza finds that trust is particularly important in financial markets. In financial markets, people need to be willing to part with their money in exchange for the promise of more money later.