The globalizability of temporal discounting

Abstract

Economic inequality is associated with extreme rates of temporal discounting, which is a behavioral pattern where individuals choose smaller, immediate financial gains over larger, delayed gains. Such patterns may feed into rising global inequality, yet it is unclear if they are a function of choice preferences or norms, or rather absence of sufficient resources to meet immediate needs. It is also not clear if these reflect true differences in choice patterns between income groups. We test temporal discounting and five intertemporal choice anomalies using local currencies and value standards in 61 countries. Across a diverse sample of 13,629 participants, we found highly consistent rates of choice anomalies. Individuals with lower incomes were not significantly different, but economic inequality and broader financial circumstances impact population choice patterns.

Have Preferences Become More Similar Worldwide?

“…This paper relates to several strands of literature on the demographics of preference heterogeneity. By documenting a decline in preference heterogeneity across birth cohorts, our evidence contributes to research on heterogeneity in preference endowments around the world (Rieger et al 2015;Ruggeri et al 2022) and introduces a global perspective of preference dynamics that generalizes previous findings obtained from samples of migrants in few selected countries (e.g., Cameron et al 2015;Giavazzi et al 2019;Rapoport et al 2021).…”

“…Recent work has documented substantial heterogeneity in time, risk, and social preferences around the world (Rieger et al 2015;Ruggeri et al 2022). This heterogeneity has been linked to the geographic, climatic, and cultural environments that have shaped preferences through evolutionary and genetic processes (Galor and Moav 2002;Cesarini et al 2009;Galor and Özak 2016;Becker et al 2020), intergenerational transmission (Dohmen et al 2012), and institutions (Alesina and Giuliano 2015).…”

Is waiting for rewards good for you? No association between impulsive choice, psychopathology, and functional outcomes in a community cohort sample

“…Population differences in preference for immediacy may have contributed to our findings with Brazilian children from lower-income families. People in lower-income countries have been shown to discount delayed reward more steeply (Ho et al, 2022;Ruggeri et al, 2022). Typically developing children in Brazil may prefer smaller sooner rewards, reducing the difference with the ADHD group.…”

“…Moreover, most of the reviewed studies were conducted in higher-income, North-American and European countries, with the exception of three studies undertaken in China (Yang et al, 2011;Yu et al, 2018;Zhu et al, 2015). Outside the field of ADHD, research suggests the socioeconomic levels of the study population affect preference for immediacy (Ho et al, 2022;Ruggeri et al, 2022). These studies use the temporal discounting paradigm (e.g., Bickel et al, 2014;Story et al, 2014) and show that individuals in lower-income countries discount the value of a reward more steeply when its availability is delayed.…”

Is waiting for rewards good for you? No association between impulsive choice, psychopathology, and functional outcomes in a large cohort sample

“…Moreover, most of the reviewed studies were conducted in higher‐income, North‐American and European countries, with the exception of three studies undertaken in China (Yang et al., 2011; Yu et al., 2018; Zhu et al., 2015). Outside the field of ADHD, research suggests the socioeconomic levels of the study population affect preference for immediacy (Ho et al., 2022; Ruggeri et al., 2022). Using the temporal discounting paradigm, these studies show individuals in lower‐income countries discount the value of a reward more steeply when its availability is delayed.…”