Universal Time Preference

Marc Oliver Rieger, Mei Wang and Thorsten Hens

No 2020-07, Working Paper Series from University of Trier, Research Group Quantitative Finance and Risk Analysis

Abstract: Time preferences are central to human decision making; therefore, a thorough understanding of their international differences is highly relevant. Previous measurements, however, vary widely in their methodology, from questions answered on the Likert scale to lottery-type questions. We show that these different measurements correlate to a large degree and that they have a common factor that can predict a broad spectrum of variables: the countries’ credit ratings, their innova-tion, gas prices (as a proxy for environmental protection), body mass index (as a proxy for health consciousness), and average years of school attendance. The resulting data on this time prefer-ence factor for N=117 countries and regions will be highly useful for further research. Our ag-gregation method is applicable to merge cross-cultural studies that measure the same latent construct with different methodologies.

Keywords: decision making; time preferences (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2020
New Economics Papers: this item is included in nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:trr:qfrawp:202007

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