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Effects of Poverty on Impatience: Preferences or Inattention?

Vojtěch Bartoš, Michal Bauer (), Julie Chytilová () and Ian Levely

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: We study two psychological channels how poverty may increase impatient behavior – an effect on time preference and reduced attention. We measured discount rates among Ugandan farmers who made decisions about when to enjoy entertainment instead of working. We find that experimentally induced thoughts about poverty-related problems increase the preference to consume entertainment early and delay work. The effect is equivalent to a 27 p.p. increase in the intertemporal rate of substitution. Using monitoring tools similar to eye tracking, a novel feature for this subject pool, we show this effect is not due to a lower ability to sustain attention.

Keywords: poverty; scarcity; time discounting; preferences; inattention; decision-making process (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-neu
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Citations: View citations in EconPapers (9)

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