Psychological and Biological Foundations of Time Preference: Evidence from a Day Reconstruction Study with Biological Tracking

14 Pages Posted: 1 Sep 2008

See all articles by Michael Daly

Michael Daly

Trinity College (Dublin)

Liam Delaney

University College Dublin (UCD) - Geary Institute and Department of Economics

Colm P. Harmon

The University of Sydney - School of Economics; IZA Institute of Labor Economics

Abstract

This paper considers the relationship between the economic concept of time preference and relevant concepts from psychology and biology. Using novel data from a time diary study conducted in Ireland that combined detailed psychometric testing with medical testing and real-time bio-tracking, we examine the distribution of a number of psychometric measures linked to the economic concept of time preferences and test the extent to which these measures form coherent clusters and the degree to which these clusters are related to underlying biological substrates. The paper finds that financial discounting is related to a range of psychological variables including consideration of future consequences, self-control, conscientiousness, extraversion, and experiential avoidance as well as being predicted by heart rate variability and blood pressure.

Keywords: time preferences, day reconstruction study, economics and psychology, economics and biology

JEL Classification: C81, D84, D01, D91

Suggested Citation

Daly, Michael and Delaney, Liam D. and Harmon, Colm P., Psychological and Biological Foundations of Time Preference: Evidence from a Day Reconstruction Study with Biological Tracking. IZA Discussion Paper No. 3674. Available at SSRN: https://ssrn.com/abstract=1261459 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Michael Daly

Trinity College (Dublin)

2-3 College Green
Dublin, Leinster
Ireland

Liam D. Delaney (Contact Author)

University College Dublin (UCD) - Geary Institute and Department of Economics ( email )

Newman Building (Room G215)
Belfield, Dublin 4
Ireland

Colm P. Harmon

The University of Sydney - School of Economics ( email )

Rm 370 Merewether (H04)
Sydney, NSW 2006 2008
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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