Effects of Poverty on Impatience: Preferences or Inattention?

Julie Chytilová (), BartoÅ¡, VojtÄ›ch, Michal Bauer and Ian Levely
Authors registered in the RePEc Author Service: Vojtěch Bartoš

No 13102, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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-exp and nep-neu
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Citations: View citations in EconPapers (10)

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Working Paper: Effects of Poverty on Impatience: Preferences or Inattention? (2018)
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