How time preferences differ: Evidence from 53 countries

Mei Wang, Marc Oliver Rieger and Thorsten Hens

Journal of Economic Psychology, 2016, vol. 52, issue C, 115-135

Abstract: We present results from the first large-scale international survey on time preference, conducted in 53 countries. All countries exhibit hyperbolic discounting patterns, i.e., the immediate future is discounted more than far future. We also observe higher heterogeneity for shorter time horizons, consistent with the pattern reviewed by Frederick, Loewenstein, and O’Donoghue (2002). Cultural factors as captured by the Hofstede cultural dimensions (Hofstede, 1991) contribute significantly to the variation of time discounting, even after controlling for economic factors, such as GDP, inflation rate and growth rate. In particular, higher levels of Uncertainty Avoidance are associated with stronger hyperbolic discounting, whereas higher degrees of Individualism and Long Term Orientation predict stronger tendency to wait for larger payoffs. We also find the waiting tendency is correlated with innovation, environmental protection, crediting rating, and body mass index at country level after controlling for county wealth. These results help us to enhance the understanding of differences across financial markets and economic behavior worldwide.

Keywords: Time preferences; Intertemporal decision; Endogenous preference; Cross-cultural comparison (search for similar items in EconPapers)
JEL-codes: D90 F40 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (123)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:52:y:2016:i:c:p:115-135

DOI: 10.1016/j.joep.2015.12.001

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