Psychological Effects of Poverty on Time Preferences

Vojtěch Bartoš, Michal Bauer, Julie Chytilová () and Ian Levely ()
Additional contact information
Julie Chytilová: Charles University, Prague
Ian Levely: King's College London

No 14607, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We test whether an environment of poverty affects time preferences through purely psychological channels. We measured discount rates among farmers in Uganda who made decisions about when to enjoy entertainment instead of working. To circumvent the role of economic constraints, we experimentally induced thoughts about poverty-related problems, using priming techniques. We find that thinking about poverty increases the preference to consume entertainment early and to delay work. Using monitoring tools similar to eye tracking, a novel feature for this subject pool, we show that this effect is unlikely to be driven by less careful decision-making processes.

Keywords: self-control; time preferences; scarcity; poverty; inattention (search for similar items in EconPapers)
JEL-codes: C93 D91 O12 (search for similar items in EconPapers)
Pages: 112 pages
Date: 2021-07
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-isf and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published - published in: Economic Journal, 2021, 131 (638), 2357 - 2382

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Journal Article: Psychological Effects of Poverty on Time Preferences (2021)
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