Working Papers, Department of Economics, Lund University
Long Term Stability of Time Preferences and the Role of the Macroeconomic Situation
Abstract: We look at the stability of survey based subjective time
preferences over time using data from a Dutch panel survey with a long time
horizon and find that the ranking of individual time preferences is stable.
Simple observation of the aggregated measured time preferences reveals
instability in aggregated preferences. In order to shed light on this
instability we look at the relationship between the individual
socio-economic situation and time preferences and the macroeconomic
situation and time preferences. While we find no clear relationship between
socio-economic situation and time preferences, we find that for the sample
as a whole patience is positively correlated with economic growth, but
negatively correlated with income inequality. When studying how the
estimations differ across income groups we observe that there is a
considerable asymmetry in how different income groups react to changes in
the macroeconomic situation.
Keywords: Time preferences; stability of preferences; income inequality; economic growth; determinants of preferences; (follow links to similar papers)
JEL-Codes: D01; D63; J31; (follow links to similar papers)
42 pages, March 9, 2016, Revised August 29, 2016
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