Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: September, 30th
Room : 3001

Andreas PEICHL (Speaking Of Debt: Framing, Guilt, And Economics Choices)

Abstract :

“Debt aversion varies widely across countries, shaped by economic, institutional, and cultural factors. In several Germanic languages, including German, Dutch, and Swedish, the common word for “debt” also means “guilt”. While this semantic overlap has long been suspected to influence borrowing behavior, existing evidence is purely correlational, leaving open whether language shapes attitudes or merely reflects pre-existing norms. We employ large-scale survey and incentivized choice experiments to provide the first causal evidence that guilt-connoted language reduces willingness to borrow. Across seven countries, randomizing whether debt is described using a guilt-connoted term or a neutral synonym shows that moral connotations significantly lower approval of public borrowing, decrease stated and actual willingness to take on personal debt, and influence firm-level financing plans. We further use text analysis to show that German politicians opposing public borrowing disproportionately employ guilt-connoted terms in parliamentary speeches, and that commercial lenders use such terms selectively in debt-relief advertising. Together, our findings demonstrate that language can activate moral frames without explicit moral appeals — shaping economic decisions in measurable and policy-relevant ways — and is strategically employed in political and commercial discourse.Debt aversion varies widely across countries, shaped by economic, institutional, and cultural factors. In several Germanic languages, including German, Dutch, and Swedish, the common word for “debt” also means “guilt”. While this semantic overlap has long been suspected to influence borrowing behavior, existing evidence is purely correlational, leaving open whether language shapes attitudes or merely reflects pre-existing norms. We employ large-scale survey and incentivized choice experiments to provide the first causal evidence that guilt-connoted language reduces willingness to borrow. Across seven countries, randomizing whether debt is described using a guilt-connoted term or a neutral synonym shows that moral connotations significantly lower approval of public borrowing, decrease stated and actual willingness to take on personal debt, and influence firm-level financing plans. We further use text analysis to show that German politicians opposing public borrowing disproportionately employ guilt-connoted terms in parliamentary speeches, and that commercial lenders use such terms selectively in debt-relief advertising. Together, our findings demonstrate that language can activate moral frames without explicit moral appeals — shaping economic decisions in measurable and policy-relevant ways — and is strategically employed in political and commercial discourse.”

Organizers:
Benoît SCHMUTZ (Pôle économie du CREST)
Clément MALGOUYRES (Pôle économie du CREST)

Sponsors:
CREST