Effects of Poverty on Impatience: Preferences or Inattention?

CERGE-EI Working Paper Series No. 623

65 Pages Posted: 5 Oct 2018

See all articles by Vojtech Bartos

Vojtech Bartos

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Michal Bauer

Charles University in Prague - Institute of Economic Studies; CERGE-EI

Julie Chytilová

Charles University in Prague - Department of Economics

Ian Levely

Wageningen University

Date Written: September 1, 2018

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

Suggested Citation

Bartos, Vojtech and Bauer, Michal and Chytilová, Julie and Levely, Ian, Effects of Poverty on Impatience: Preferences or Inattention? (September 1, 2018). CERGE-EI Working Paper Series No. 623, Available at SSRN: https://ssrn.com/abstract=3247690 or http://dx.doi.org/10.2139/ssrn.3247690

Vojtech Bartos (Contact Author)

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

Michal Bauer

Charles University in Prague - Institute of Economic Studies ( email )

Opletalova 26
Prague 1, 110 00
Czech Republic
+420 222 112 317 (Phone)
+420 222 112 304 (Fax)

HOME PAGE: http://ies.fsv.cuni.cz/index.php?module=kernel&action=user&id_user=183&lng=en_GB

CERGE-EI ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

Julie Chytilová

Charles University in Prague - Department of Economics ( email )

Opletalova 26
Prague 1, 163 00
Czech Republic

HOME PAGE: http://ies.fsv.cuni.cz/index.php?module=kernel&action=user&id_user=130&lng=cs_CZ

Ian Levely

Wageningen University ( email )

Hollandseweg 1
Wageningen, 6706KN
Netherlands

HOME PAGE: http://www.IanLevely.com

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
105
Abstract Views
712
rank
316,068
PlumX Metrics