There have been other studies that measure discounting at the international level, allowing for comparison across countries, while examining individual, cultural, economic and geographic differences and how they are related to future oriented thinking.
Our closest predecessors areWang et al.(2016) andFalk et al.(2018).
Wang et al. (2016) collected data from 53 countries using a large-scale in-ternational survey on time preferences comprising almost 7000 undergraduate students in Economics, Finance or Business Administration. Time preferences
were measured by asking three questions. First, their participants chose be-tween “$3400 dollars this month” and “$3800 dollars next month”. Then, they were asked to state the delayed payments which would make them indifferent between $100 now and that payment in one year, or in ten years. Wang et al.
(2016) tested whether demographic variables, economic factors, and a range of individual differences predicted patience. They found a small effect of age, with older students more willing to choose the $3800 reward than younger ones. However, age differences in a sample of students are really small. Three of Hofstede’s cultural dimensions (Hofstede,2001), measured at the individual level, were found to have an impact on discounting. The three cultural factors were what Hofstede referred to as Individualism, Uncertainty avoidance, and Long Term Orientation1. Higher levels of uncertainty avoidance were asso-ciated with stronger hyperbolic discounting and higher present bias, whereas higher degrees of individualism and long term orientation were associated with a stronger tendency to wait for larger payoffs. GDP per capita as well, was positively associated with the tendency to wait for larger payoffs.
Falk et al. (2018) conducted a major study of global variation in eco-nomic preferences using their own proprietary Global Preferences Survey (GPS).
As well as time preferences, they measured risk preference, positive and neg-ative reciprocity, altruism, and trust from 80,000 respondents in 76 countries.
Time preferences were measured by means of a quantitative and a qualitative measure (Falk et al.,2016). The quantitative measure involved five hypothet-ical binary choices between an immediate and delayed payment. The specific items asked depended on the respondents’ answers to previous questions using a “staircase” method, and the monetary amounts were expressed in the re-spective local currency, scaled relative to the median household income in the given country. The qualitative measure was a self-assessment of the willingness to wait based on the statement “how willing are you to give up something that is beneficial for you today in order to benefit more from that in the future?”.
Falk et al. (2018) combined the two measures to create a patience index. At the individual level, they found that patience varies with age, in a hump-shaped pattern: middle-aged individuals were the most patient, compared with the young and the elderly. Patience was also higher for individuals with
1The labels for Hofstede (2001) scales may be misleading taken on their own, so it is worth mentioning the specific measures. In Section 4.4 we carefully explain how these measures were taken and we spell out the differences betweenWang et al. (2016) approach to measure Hofstede’s cultural dimensions and the one followed by Hofstede, on whichFalk et al.(2018) and we rely.
higher cognitive ability and individuals with higher subjective maths skills.
Females were more impatient than males. Finally, they found patience to be positively related to savings and educational attainment of the respondents.
Patience at the national level was correlated with: individualism and long-term orientation (Hofstede, 2001) measured at the national level; GDP per capita; geographic and biological variables that have previously been argued to be conducive for economic development (Diamond,2005;Olsson and Hibbs, 2005;Spolaore and Wacziarg,2013); distance from the equator; weak Future Time Reference (Chen,2013); pronoun drop not allowed in the language of the country (Tabellini, 2008); share of protestants in the country (Weber, 1930;
Doepke and Zilibotti, 2008) and risk taking. In addition, they found nega-tive correlation of their index with the intensity of family ties (Alesina and Giuliano, 2014). They found that western European and English speaking countries were the most patient. In particular, when comparing the effect of the preferences they estimated, Falk et al. (2018) found that patience has a much higher explanatory power of GDP per capita of a country than the others (risk taking, positive and negative reciprocity, trust, altruism).
Other studies on cross-cultural differences in temporal discounting in-volved only two or three countries. Tan and Johnson(1996) studied Canadian undergraduates and foreign undergraduates of Chinese descents but they re-ported no difference in discount rates between the two groups. Du et al.
(2002) studied American, Chinese, and Japanese graduate students on two tasks. In the delay discounting task, participants made choices between im-mediate and delayed hypothetical monetary rewards; in the probability dis-counting task, participants made choices between certain and probabilistic rewards. They found that the Americans and Chinese discounted delayed re-wards more steeply than the Japanese. In addition, the Americans discounted probabilistic rewards the most, whereas the Chinese discounted probabilistic rewards the least. Mahajna et al. (2008) found that Israeli Jews, who are supposedly from a more individualistic society, are more patient than Israeli Arabs, who are supposedly from a more collectivistic society. They asked their participants to bid and ask prices for delayed fixed amounts and for lotteries and found that the subjective discount rate of Israeli Arabs were significantly higher than that of Israeli Jews.