Does Education Matter in Patience Formation? Evidence from Ugandan Villages
AbstractThe paper aims to contribute to the understanding of why there is a lack of domestic saving and investment in rural parts of sub-Saharan Africa. It focuses on heterogeneity in inter-temporal preferences as a possible explanation of this important puzzle. The study is based on a unique experimental data set collected from 856 respondents in Ugandan villages and scrutinizes how individual patience – measured by the discount rate – is formed. The results suggest that Ugandan respondents are substantially less patient than their counterparts in similar experimental studies undertaken in developed countries and South Asia. We find a strong negative association between the level of education and the individual discount rate. Furthermore, we took advantage of the Ugandan education reform in 1996 and varying school frequency to demonstrate the causal relationship stemming from education to patience. The estimates suggest that an additional year at school decreases the discount rate on average by 35 percentage points after controlling for other characteristics (age, income group, sex, marital status and clan linkage). Our findings strongly accord with patience understood as a non-cognitive ability which needs to be taught by parents, learnt at school and promoted by social norms. The Ugandan responses, therefore, propose a new way in which education may influence development in sub-Saharan Africa – by shaping individual patience.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its series Working Papers IES with number 2007/10.
Length: 19 pages
Date of creation: Feb 2007
Date of revision: Feb 2007
Time preference; patience; discount rate; education; savings; economic development; field survey; sub-Saharan Africa;
Find related papers by JEL classification:
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-AFR-2007-02-17 (Africa)
- NEP-ALL-2007-02-17 (All new papers)
- NEP-DEV-2007-02-17 (Development)
- NEP-EDU-2007-02-17 (Education)
- NEP-SOC-2007-02-17 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barro, Robert J, 1991.
"Economic Growth in a Cross Section of Countries,"
The Quarterly Journal of Economics,
MIT Press, vol. 106(2), pages 407-43, May.
- Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
- Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
- Xavier Sala-i-Martin, 1996.
"Transfers, Social Safety Nets, and Economic Growth,"
IMF Working Papers
96/40, International Monetary Fund.
- Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
- Glenn Harrison & Morten Lau & Elisabet Rutstrom & Melonie Williams, 2002. "Estimating individual discount rates in denmark: A field experiment," Artefactual Field Experiments 00062, The Field Experiments Website.
- Robert J. Barro, 1995.
"Inflation and Economic Growth,"
NBER Working Papers
5326, National Bureau of Economic Research, Inc.
- Martin, Philippe & Rogers, Carol Ann, 1997.
"Stabilization Policy, Learning-by-Doing, and Economic Growth,"
Oxford Economic Papers,
Oxford University Press, vol. 49(2), pages 152-66, April.
- Martin, Philippe & Rogers, Carol Ann, 1995. "Stabilization Policy, Learning by Doing, and Economic Growth," CEPR Discussion Papers 1130, C.E.P.R. Discussion Papers.
- Chakraborty, Shankha, 2004.
"Endogenous lifetime and economic growth,"
Journal of Economic Theory,
Elsevier, vol. 116(1), pages 119-137, May.
- Shankha Chakraborty, 2002. "Endogenous Lifetime and Economic Growth," University of Oregon Economics Department Working Papers 2002-03, University of Oregon Economics Department, revised 26 Jan 2002.
- Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
- Glenn W. Harrison & Morten I. Lau & Melonie B. Williams, 2002.
"Estimating Individual Discount Rates in Denmark: A Field Experiment,"
American Economic Review,
American Economic Association, vol. 92(5), pages 1606-1617, December.
- Glenn W. Harrison & Morten I. Lau & Melonie B. Williams, 2001. "Estimating Individual Discount Rates in Denmark: A Field Experiment," NCEE Working Paper Series 200102, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Nov 2001.
- Abigail Barr, 1995.
"The missing factor: entrepreneurial networks, enterprises and economic growth in Ghana,"
Economics Series Working Papers
WPS/1995-11, University of Oxford, Department of Economics.
- Abigail Barr, 1995. "The missing factor: entrepreneurial networks, enterprises and economic growth in Ghana," CSAE Working Paper Series 1995-11, Centre for the Study of African Economies, University of Oxford.
- Azariadis, Costas & Stachurski, John, 2005.
Handbook of Economic Growth,
in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5
- Pender, John L., 1996. "Discount rates and credit markets: Theory and evidence from rural india," Journal of Development Economics, Elsevier, vol. 50(2), pages 257-296, August.
- Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
- Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
- Laibson, David I., 1997.
"Golden Eggs and Hyperbolic Discounting,"
4481499, Harvard University Department of Economics.
- Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
- Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
- Haaparanta, Pertti & Puhakka, Mikko, 2004. "Endogenous time preference, investment and development traps," BOFIT Discussion Papers 4/2004, Bank of Finland, Institute for Economies in Transition.
- Becker, Gary S & Mulligan, Casey B, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 729-58, August.
- Esther Duflo, 2000.
"Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment,"
NBER Working Papers
7860, National Bureau of Economic Research, Inc.
- Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
- Maribeth Coller & Melonie Williams, 1999. "Eliciting Individual Discount Rates," Experimental Economics, Springer, vol. 2(2), pages 107-127, December.
- Anderson, C Leigh & Dietz, Maya & Gordon, Andrew & Klawitter, Marieka, 2004. "Discount Rates in Vietnam," Economic Development and Cultural Change, University of Chicago Press, vol. 52(4), pages 873-87, July.
- Lawrance, Emily C, 1991. "Poverty and the Rate of Time Preference: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 54-77, February.
- Davies, Emma & Lea, Stephen E. G., 1995. "Student attitudes to student debt," Journal of Economic Psychology, Elsevier, vol. 16(4), pages 663-679, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Herrmannova).
If references are entirely missing, you can add them using this form.