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How Time Preferences Differ: Evidence from 45 Countries

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Author Info

  • Wang, Mei

    ()
    (WHU - Otto Beisheim School of Management)

  • Rieger, Marc Oliver

    ()
    (Dept. IV, Business Administration, University of Trier)

  • Hens, Thorsten

    ()
    (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)

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    Abstract

    We present results from the first large-scale international survey on time discounting, conducted in 45 countries. Cross-country variation cannot simply be explained by economic variables such as interest rates or in ation. In particular, we find strong evidence for cultural differences, as measured by the Hofstede cultural dimensions. For example, high levels of Uncertainty Avoidance or Individualism are both associated with strong hyperbolic discounting. Moreover, as application of our data, we find evidence for an impact of time preferences on the capability of technological innovations in a country and on environmental protection.

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    Bibliographic Info

    Paper provided by Department of Business and Management Science, Norwegian School of Economics in its series Discussion Papers with number 2011/18.

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    Length: 55 pages
    Date of creation: 31 Oct 2011
    Date of revision:
    Handle: RePEc:hhs:nhhfms:2011_018

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    Postal: NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway
    Phone: +47 55 95 92 93
    Fax: +47 55 95 96 50
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    Web page: http://www.nhh.no/en/research-faculty/department-of-business-and-management-science.aspx
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    Related research

    Keywords: Time preferences; Intertemporal decision; Endogenous preference; Cross-cultural comparison;

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    References

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    1. Yesuf, Mahmud & Bluffstone, Randall, 2008. "Wealth and Time Preference in Rural Ethiopia," Discussion Papers dp-08-16-efd, Resources For the Future.
    2. Huang, Rocco R., 2007. "Distance and trade: Disentangling unfamiliarity effects and transport cost effects," European Economic Review, Elsevier, vol. 51(1), pages 161-181, January.
    3. Laibson, David, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 443-77, May.
    4. Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
    5. Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
    6. Read, Daniel & Roelofsma, Peter H. M. P., 2003. "Subadditive versus hyperbolic discounting: A comparison of choice and matching," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(2), pages 140-153, July.
    7. Uri Ben-Zion & Ahmad Mahajna & Ravid Bogaire & TAL SHAVIT, 2007. "Subjective Discount Rates Among Israeli Arabs And Israeli Jews," Working Papers 0710, Ben-Gurion University of the Negev, Department of Economics.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Cross-country variation in time preference
      by Jason Collins in Evolving Economics on 2013-11-18 13:27:27
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    Cited by:
    1. Basu, Karna, 2014. "Commitment savings in informal banking markets," Journal of Development Economics, Elsevier, vol. 107(C), pages 97-111.

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