Editing Time preference (section)

== Differences in time preference ==
Although the average discount rate may be of interest, that average typically obscures differences in individual valuations. Many factors that differ by people can influence their discount rates. This helps predict time preference for specific subgroups.

=== Age & Income ===
The effect of age on discounting has long been studied. There are many theories as to why age might affect time preference: risk tolerance, time perspective, and importantly, the covariant of income. In one of the most cited studies on this topic describes this interaction, the authors find that in a high-income group, discounting was the same across ages. However, within the group of older adults, being low income greatly increased discounting.<ref>{{Cite journal |last1=Green |first1=L. |last2=Myerson |first2=J. |last3=Lichtman |first3=D. |last4=Rosen |first4=S. |last5=Fry |first5=A. |date=March 1996 |title=Temporal discounting in choice between delayed rewards: the role of age and income |url=https://pubmed.ncbi.nlm.nih.gov/8726373/ |journal=Psychology and Aging |volume=11 |issue=1 |pages=79–84 |doi=10.1037/0882-7974.11.1.79 |issn=0882-7974 |pmid=8726373}}</ref> A recent meta-analysis on the effect of age alone concluded that there is no effect of age alone on discounting.<ref>{{Cite journal |last1=Seaman |first1=Kendra L. |last2=Abiodun |first2=Sade J. |last3=Fenn |first3=Zöe |last4=Samanez-Larkin |first4=Gregory R. |last5=Mata |first5=Rui |date=February 2022 |title=Temporal discounting across adulthood: A systematic review and meta-analysis |journal=Psychology and Aging |volume=37 |issue=1 |pages=111–124 |doi=10.1037/pag0000634 |issn=1939-1498 |pmc=8827494 |pmid=35113618}}</ref> A response to this article explained that although there may be no overall effect, within specific income groups, there are differences by age. Although age doesn’t affect high-income people’s time preferences, it does affect the low-income group. Younger, low-income people have higher discounting than older, low-income people. They also provide a mechanism by which this phenomenon occurs: a scarcity mindset increases discounting. By controlling for scarcity, the differences in discounting disappeared. Such results indicate that low-income, younger people experience more distress caused by scarcity, which causes them to want rewards more immediately.<ref>{{Cite journal |last1=Wan |first1=Haoran |last2=Myerson |first2=Joel |last3=Green |first3=Leonard |last4=Strube |first4=Michael J. |last5=Hale |first5=Sandra |date=September 2024 |title=Age-related differences in delay discounting: Income matters |url=https://pubmed.ncbi.nlm.nih.gov/38647450/ |journal=Psychology and Aging |volume=39 |issue=6 |pages=632–643 |doi=10.1037/pag0000818 |issn=1939-1498 |pmid=38647450|doi-access=free }}</ref>

=== Gender ===
Gender may also influence the rate of time preference. It has been shown that men generally exhibit a higher rate of discounting than women, choosing sooner rewards more often.<ref>{{Cite journal |last1=Dittrich |first1=Marcus |last2=Leipold |first2=Kristina |date=2014-03-01 |title=Gender differences in time preferences |url=https://www.sciencedirect.com/science/article/abs/pii/S0165176514000032 |journal=Economics Letters |volume=122 |issue=3 |pages=413–415 |doi=10.1016/j.econlet.2014.01.002 |issn=0165-1765|url-access=subscription }}</ref> It is theorized that it is due to women’s ability to delay gratification, and this ability is also useful in real life scenarios.<ref>{{Cite journal |last=Silverman |first=Irwin W. |date=2003-11-01 |title=Gender Differences in Delay of Gratification: A Meta-Analysis |url=https://link.springer.com/article/10.1023/A:1025872421115 |journal=Sex Roles |language=en |volume=49 |issue=9 |pages=451–463 |doi=10.1023/A:1025872421115 |issn=1573-2762|url-access=subscription }}</ref> Such situations include motherhood and saving/investment. Women may be more suited towards long term orientation because they are tasked more with parenting. It has also been found that women save and invest more, which may mean they are more adapted to delayed gratification.

=== Race ===
Race is also thought to play a role in time preference. Andreoni et al. find that a child’s ability to wait for a larger later reward was correlated with race. They did this by asking the children a series of decisions in which they could choose candy that same day or a larger amount of candy which they would receive on the next day. In analyzing the data by race, they found that black children, across all ages, were more likely to make impatient decisions than other races.<ref>{{Cite journal |last1=Andreoni |first1=James |last2=Kuhn |first2=Michael A. |last3=List |first3=John A. |last4=Samek |first4=Anya |last5=Sokal |first5=Kevin |last6=Sprenger |first6=Charles |date=2019-09-01 |title=Toward an understanding of the development of time preferences: Evidence from field experiments |url=https://www.sciencedirect.com/science/article/abs/pii/S004727271930091X |journal=Journal of Public Economics |volume=177 |pages=104039 |doi=10.1016/j.jpubeco.2019.06.007 |issn=0047-2727}}</ref> In more specific contexts, race was also found to play a role. In a study of the utility of long term water quality improvements, Viscusi et al. find that black respondents displayed higher discounting than other racial groups.<ref>{{Cite journal |last1=Viscusi |first1=W. Kip |last2=Huber |first2=Joel |last3=Bell |first3=Jason |date=2008-12-01 |title=Estimating discount rates for environmental quality from utility-based choice experiments |url=https://link.springer.com/article/10.1007/s11166-008-9045-x |journal=Journal of Risk and Uncertainty |language=en |volume=37 |issue=2 |pages=199–220 |doi=10.1007/s11166-008-9045-x |issn=1573-0476|url-access=subscription }}</ref>

=== Connection to future self ===
Another factor which may influence time preference is one’s connection to their future self. This means your ability to envision or share emotions with one’s future self. Therefore, if you feel more connected to your future, it may be easier to delay gratification.<ref>{{Cite journal |last1=McCarroll |first1=Christopher Jude |last2=Cosentino |first2=Erica |date=2020-06-01 |title=Rewarding one's Future Self: Psychological Connectedness, Episodic Prospection, and a Puzzle about Perspective |url=https://link.springer.com/article/10.1007/s13164-020-00460-2 |journal=Review of Philosophy and Psychology |language=en |volume=11 |issue=2 |pages=449–467 |doi=10.1007/s13164-020-00460-2 |issn=1878-5166|url-access=subscription }}</ref> This theory has been tested in several ways. One study measured psychological connectedness by asking participants to rate how close they felt to their future selves. They also asked the participants to rate the connectedness of fictional characters. In both cases, those who felt more intertemporally connected were also more able to delay rewards.<ref>{{Cite journal |last1=Bartels |first1=Daniel M. |last2=Rips |first2=Lance J. |date=2010 |title=Psychological connectedness and intertemporal choice. |journal=Journal of Experimental Psychology: General |language=en |volume=139 |issue=1 |pages=49–69 |doi=10.1037/a0018062 |pmid=20121312 |s2cid=14973058 |issn=1939-2222}}</ref>

=== Early life stress ===
A meta-analysis of early life stress, time preference, and prosocial preferences found that early life stress is predictive of time preference. The theory goes that early life stress affects our ability to think about the future. If you have more early life stress, you become more present focused to manage the current situation. The theory was confirmed in the analysis, wherein more early life stress was significantly correlated with present orientation on a future discounting task.<ref name=":03"/> Early life stress was also shown to be predictive of lower prosocial preferences.