Markets Make Humans WEIRDer: Evidence from 1850-1920 United States

Abstract

This paper studies the impact of market access on individualistic cultural traits, focusing on the expansion of the railroad network and population growth during 1850-1920 U.S. A county-level analysis exploits cross-sectional and time series variation in counties' access to markets that are orthogonal to local changes in railroad infrastructure. Individual-level analysis leverages a difference-in-differences framework to estimate the impact of migrating to a higher market access location. Both empirical strategies document that markets promote individualistic cultural traits. Initial results suggest that this relationship is not explained by an indirect effect operating through markets' impact on population diversity, economic development, or access to information, therefore suggesting that markets have an inherent and direct impact on culture and psychology.