Another Day, Another Currency: Self-interest, Experience, and Attitudes Toward Dollarization in Ecuador

Abstract How, if at all, does self-interest bear on individuals’ economic policy preferences? Though conventional theories of preference formation usually assume a role for self-interest, the informational demands associated with understanding policies can prevent individuals from forming attitudes an egocentric basis. Building work showing that policy-specific information facilitates egocentrism, we argue personal experience alternative options is necessary self-interested preferences to materialize. To test this argument, leverage Ecuador’s adoption U.S. dollar (i.e., dollarization) and examine whether material-based toward exchange rate are conditional experiencing transition Ecuadorian sucre dollar. We find lived dollarization causes align more closely citizens’ as proxied by measures capital ownership skill level. In addition, drives against dollarized economy, but primarily among poor low-skill workers—precisely groups benefit less shift. Rather than entirely discredit these findings suggest scholars devote greater attention how contextual factors strengthen attitudes.