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What is the proper location for user defined environment variables in Ubuntu?

My first guess would be ~/.profile. Ubuntu already creates that file which conditionally sources ~/.bashrc and does some other things. That can't be it.

My second guess would be ~/.bashrc. Ubuntu also creates that and it contains even more than ~/.profile.

From: What are the functional differences between .profile .bash_profile and .bashrc

.bash_profile and .bashrc are specific to bash, whereas .profile is read by many shells in the absence of their own shell-specific config files. (.profile was used by the original Bourne shell.) .bash_profile or .profile is read by login shells, along with .bashrc; subshells read only .bashrc. (Between job control and modern windowing systems, .bashrc by itself doesn't get used much. If you use screen or tmux, screens/windows usually run subshells instead of login shells.)

The idea behind this was that one-time setup was done by .profile (or shell-specific version thereof), and per-shell stuff by .bashrc. For example, you generally only want to load environment variables once per session instead of getting them whacked any time you launch a subshell within a session, whereas you always want your aliases (which aren't propagated automatically like environment variables are).

Other notable shell config files:

/etc/bash_profile (fallback /etc/profile) is read before the user's .profile for system-wide configuration, and likewise /etc/bashrc in subshells (no fallback for this one). Many systems including Ubuntu also use an /etc/profile.d directory containing shell scriptlets, which are . (source)-ed from /etc/profile; the fragments here are per-shell, with *.sh applying to all Bourne/POSIX compatible shells and other extensions applying to that particular shell.