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

Author

Listed:
  • Daly, Michael

    (Trinity College Dublin)

  • Delaney, Liam

    (University of Stirling)

  • Harmon, Colm P.

    (University of Edinburgh)

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.

Suggested Citation

  • Daly, Michael & Delaney, Liam & Harmon, Colm P., 2008. "Psychological and Biological Foundations of Time Preference: Evidence from a Day Reconstruction Study with Biological Tracking," IZA Discussion Papers 3674, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3674
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    References listed on IDEAS

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    1. Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 729-758.
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    5. Heckman, James J., 2007. "The Economics, Technology and Neuroscience of Human Capability Formation," IZA Discussion Papers 2875, Institute of Labor Economics (IZA).
    6. Colin F. Camerer & George Loewenstein & Drazen Prelec, 2004. "Neuroeconomics: Why Economics Needs Brains," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 555-579, October.
    7. Gergana Y. Nenkov & J. Jeffrey Inman & John Hulland, 2008. "Considering the Future: The Conceptualization and Measurement of Elaboration on Potential Outcomes," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 35(1), pages 126-141, November.
    8. Daniel Kahneman & Alan B. Krueger & David Schkade & Norbert Schwarz & Arthur Stone, 2004. "Toward National Well-Being Accounts," American Economic Review, American Economic Association, vol. 94(2), pages 429-434, May.
    9. 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.
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    Cited by:

    1. Bruderer Enzler, Heidi & Diekmann, Andreas & Meyer, Reto, 2014. "Subjective discount rates in the general population and their predictive power for energy saving behavior," Energy Policy, Elsevier, vol. 65(C), pages 524-540.

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    More about this item

    Keywords

    economics and biology; economics and psychology; day reconstruction study; time preferences;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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