In improving real-life outcomes, such as human capital accumulation and better financial decision making, it is important to understand the impact of time preferences (e.g. patience) on an individual’s decision making. This research aims to support new policy suggestions by developing an understanding of how outside factors influence the stability of time preferences.
The challenge
Across research, non-cognitive skills – such as time preferences (e.g. patience) and self-control – are agreed to be strong predictions of educational attainment, human capital accumulation, health and wealth. However, there is limited consensus about the best way to measure these outcomes and the sustainability of these measures over time. This project will explore current gaps in the literature; focusing on how these measures are affected by outside factors (such as subjects’ expectations) to understand the stability of time preference measurements.
Solution
The pilot studies provided indirect evidence for the effect of expectations on elicited time preference measures. Based on this data, the second experiment will manipulate subjects’ expectations of when to receive the reward to understand the stability of time preferences.
Outcome and impact
These findings will help better understand the relation between time preferences and real-life outcomes, such as human capital accumulation and better financial decision-making. With the findings related to the improvement of people’s long-term life outcomes, the research will be able to support new policy suggestions.
End poverty in all its forms everywhere
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
Ensure sustainable consumption and production patterns
