Psychological Effects of Poverty on Time Preferences

Arbeitspapier

We test whether an environment of poverty affects time preferences through purely psychological channels. We measured discount rates among farmers in Uganda who made decisions about when to enjoy entertainment instead of working. To circumvent the role of economic constraints, we experimentally induced thoughts about poverty-related problems, using priming techniques. We find that thinking about poverty increases the preference to consume entertainment early and to delay work. Using monitoring tools similar to eye tracking, a novel feature for this subject pool, we show that this effect is unlikely to be driven by less careful decision-making processes.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 14607

Classification and Topics

• Classification: Wirtschaft ; Field Experiments ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Microeconomic Analyses of Economic Development
• Subject: poverty ; scarcity ; time preferences ; self-control ; inattention

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bartos, Vojtech ; Bauer, Michal ; Chytilová, Julie ; Levely, Ian
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/245658