Scandinavian Working Papers in Economics

Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

No 2011/18: How Time Preferences Differ: Evidence from 45 Countries

Mei Wang (), Marc Oliver Rieger () and Thorsten Hens ()
Additional contact information
Mei Wang: WHU - Otto Beisheim School of Management, Postal: WHU, Otto Beisheim School of Management , Burgplatz 2, 56179 Vallendar, Germany
Marc Oliver Rieger: Dept. IV, Business Administration, University of Trier, Postal: University of Trier, University Department IV, Universit├Ątsring 15, 54286 Trier, Germany
Thorsten Hens: Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration, Postal: University of Zurich, Department of Banking and Finance, Plattenstrasse 32, CH-8032 Z├╝rich, Switzerland

Abstract: We present results from the first large-scale international survey on time discounting, conducted in 45 countries. Cross-country variation cannot simply be explained by economic variables such as interest rates or in ation. In particular, we find strong evidence for cultural differences, as measured by the Hofstede cultural dimensions. For example, high levels of Uncertainty Avoidance or Individualism are both associated with strong hyperbolic discounting. Moreover, as application of our data, we find evidence for an impact of time preferences on the capability of technological innovations in a country and on environmental protection.

Keywords: Time preferences; Intertemporal decision; Endogenous preference; Cross-cultural comparison

JEL-codes: D90; F40

55 pages, October 31, 2011

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