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How Time Preferences Differ: Evidence from 45 Countries

Author

Listed:
  • Mei WANG

    (University of Zurich and Swiss Finance Institute)

  • Marc Oliver RIEGER

    (University of Zurich)

  • Thorsten HENS

    (University of Zurich and Swiss Finance Institute)

Abstract

We present results from the first large-scale international survey on time discounting, conducted in 45 countries. Cross-country varia- tion cannot simply be explained by economic variables such as interest or inflation rates. In particular, we find strong evidence for cultural differences, as measured by the Hofstede cultural dimensions. For example, large levels of Uncertainty Avoidance are associated with strong hyperbolic discounting. We also find relations between time preferences and risk preferences, like loss aversion. For instance, sub- jects with high loss aversion tend to show larger time discounting. Moreover, our analysis shows an impact of time preferences on the capability of technological innovations in a country and on environ- mental protection.

Suggested Citation

  • Mei WANG & Marc Oliver RIEGER & Thorsten HENS, 2009. "How Time Preferences Differ: Evidence from 45 Countries," Swiss Finance Institute Research Paper Series 09-47, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp0947
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    More about this item

    Keywords

    Intertemporal decision; Endogenous preference; Cross-cultural.;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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