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Evolution of Time Preference by Natural Selection

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  • Rogers, Alan R

Abstract

This paper entertains the hypothesis that human time preferences are in evolutionary equilibrium (i.e., that no mutation changing time preferences could be favored by natural selection). This hypothesis implies that the marginal rate of substitution (MRS) holding Darwinian fitness constant must equal the MRS holding utility constant. Furthermore, in a market economy, the latter must equal the MRS in exchange. Exploiting these principles, the author finds that the long-term real interest rate should equal ln(2) per generation (about 2 percent per year) and that young adults should discount the future more rapidly than their elders. Copyright 1994 by American Economic Association.

Suggested Citation

  • Rogers, Alan R, 1994. "Evolution of Time Preference by Natural Selection," American Economic Review, American Economic Association, vol. 84(3), pages 460-481, June.
  • Handle: RePEc:aea:aecrev:v:84:y:1994:i:3:p:460-81
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    References listed on IDEAS

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    1. Schankerman, Mark & Pakes, Ariel, 1986. "Estimates of the Value of Patent Rights in European Countries during the Post-1950 Period," Economic Journal, Royal Economic Society, vol. 96(384), pages 1052-1076, December.
    2. Huffman, Wallace E. & Evenson, Robert E., 1993. "Science for Agriculture: A Long Term Perspective," Staff General Research Papers Archive 10997, Iowa State University, Department of Economics.
    3. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, pages 1157-1173.
    4. Freeman, Richard B. & Holzer, Harry J. (ed.), 1986. "The Black Youth Employment Crisis," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226261645.
    5. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, pages 1157-1173.
    6. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, pages 577-598.
    7. Richard B. Freeman & Harry J. Holzer, 1986. "The Black Youth Employment Crisis," NBER Books, National Bureau of Economic Research, Inc, number free86-1.
    8. Fellner, William, 1970. "Trends in the Activities Generating Technological Progress," American Economic Review, American Economic Association, pages 1-29.
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