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Time preferences and their life outcome correlates: Evidence from a representative survey

Author

Listed:
  • Daniel Horn

    (Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Hungary and Eötvös Loránd University)

  • Hubert Janos Kiss

    (Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Hungary and Eötvös Loránd University)

Abstract

We collect data on time preferences of a representative sample of the Hungarian population in a non-incentivized way and investigate how patience and present bias associate with important life outcomes in five domains: i) educational attainment, ii) unemployment, iii) income and wealth, iv) financial decisions and difficulties, and v) health. Based on the literature, we formulate the broad hypotheses that patience fosters, while present bias hinders positive outcomes in the domains under study. We document a consistent and often significant positive effect of patience in almost all areas (except unemployment), with the strongest effects in escaping low educational attainment, wealth and financial decisions. We find that present bias associates significantly with saving decisions and financial troubles.

Suggested Citation

  • Daniel Horn & Hubert Janos Kiss, 2019. "Time preferences and their life outcome correlates: Evidence from a representative survey," Budapest Working Papers on the Labour Market 1901, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:bworkp:1901
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    Citations

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    Cited by:

    1. Gregory N. Price, 2022. "Incarceration risk, asset pricing, and black‐white wealth inequality," Social Science Quarterly, Southwestern Social Science Association, vol. 103(5), pages 1306-1319, September.
    2. Berlinger, Edina & Kiss, Hubert János & Khayouti, Sára, 2022. "Loan forbearance takeup in the Covid-era - The role of time preferences and locus of control," Finance Research Letters, Elsevier, vol. 50(C).
    3. Dar, Shafkat Shafi & Sahu, Sohini, 2022. "The effect of language on financial inclusion," Economic Modelling, Elsevier, vol. 106(C).
    4. Islam, Asad & Tasneem, Sakiba & Wang, Liang Choon, 2023. "Fishermen’s competitiveness and labour market performance: Evidence from shrimpers in Bangladesh," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(03), April.
    5. Thomas Meissner & Xavier Gassmann & Corinne Faure & Joachim Schleich, 2023. "Individual characteristics associated with risk and time preferences: A multi country representative survey," Journal of Risk and Uncertainty, Springer, vol. 66(1), pages 77-107, February.
    6. Hjertstrand, Per & Proctor, Andrew & Westerlund, Joakim, 2025. "A Simplified Klein–Spady Estimator for Binary Choice Models," Working Paper Series 1535, Research Institute of Industrial Economics.
    7. Edina Berlinger & Sára Khayouti & Hubert János Kiss, 2022. "Time discounting predicts loan forbearance takeup," CERS-IE WORKING PAPERS 2201, Institute of Economics, Centre for Economic and Regional Studies.
    8. Daniel Horn & Hubert Kiss Janos, 2020. "Do individuals with children value the future more?," CERS-IE WORKING PAPERS 2010, Institute of Economics, Centre for Economic and Regional Studies.

    More about this item

    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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