Time Preferences and Their Life Outcome Correlates: Evidence from a Representative Survey

49 Pages Posted: 26 Mar 2019

See all articles by Daniel Horn

Daniel Horn

Hungarian Academy of Sciences (HAS) - Institute of Economics CERS-HAS (IEHAS)

Hubert Janos Kiss

Hungarian Academy of Sciences (HAS) - Institute of Economics CERS-HAS (IEHAS); Corvinus University of Budapest

Date Written: March 3, 2019

Abstract

We collect data on time preferences of a representative sample of the Hungarian population in a non-incentivized way and investigate how patience and present bias associate with important life outcomes in five domains: i) educational attainment, ii) unemployment, iii) income and wealth, iv) financial decisions and difficulties, and v) health. Based on the literature, we formulate the broad hypotheses that patience fosters, while present bias hinders positive outcomes in the domains under study. We document a consistent and often significant positive effect of patience in almost all areas (except unemployment), with the strongest effects in escaping low educational attainment, wealth and financial decisions. We find that present bias associates significantly with saving decisions and financial troubles.

Keywords: educational attainment, financial decisions and difficulties, income and wealth, patience, present bias, risk preferences

JEL Classification: D12, D14, D31, D90, I12, I21, J6

Suggested Citation

Horn, Daniel and Kiss, Hubert Janos, Time Preferences and Their Life Outcome Correlates: Evidence from a Representative Survey (March 3, 2019). Available at SSRN: https://ssrn.com/abstract=3346024 or http://dx.doi.org/10.2139/ssrn.3346024

Daniel Horn

Hungarian Academy of Sciences (HAS) - Institute of Economics CERS-HAS (IEHAS) ( email )

Budaorsi ut 45
Budapest, 1112
Hungary

Hubert Janos Kiss (Contact Author)

Hungarian Academy of Sciences (HAS) - Institute of Economics CERS-HAS (IEHAS) ( email )

Budaorsi ut 45
Budapest, 1112
Hungary

Corvinus University of Budapest

Hungary

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