Published: June 30, 2020


Download: Life Course Centre Working Paper: 2020-16

Authors:

Stephen L. Cheung, Agnieszka Tymula, and Xueting Wang. 


Non-Technical Summary:

Self-control is viewed in economics and other disciplines as a key individual characteristic responsible for effective self-regulation and personal goal attainment. Economists model self-control problems through time-inconsistent preferences. The underlying assumption of the model is that agents have a “present bias” toward current consumption, as the value of all future rewards are downweighed relative to rewards in the present.

Empirical tests of these preferences largely rely on experimental elicitation methods using monetary rewards, with several recent studies failing to find present bias for money. In this paper, in a within-subjects longitudinal experiment, we compare estimates of present bias for money with estimates for healthy and unhealthy foods. Our sample consists of 697 low-income Chinese high school students, a group that not only departs from the university student sample which has been widely studied in prior studies, but also in their age. Self-control established early in life is critical to personal development, yet few studies to date have estimated time preferences in children and adolescents. Our sample is also unique in their socio-economic status. One reason why recent carefully designed studies do not find present bias for money may simply be that the participants with higher income, as some studies document, did not have serious problems of self-control to begin with.

We find strong present bias for both food and money. On average, subjects choose to receive 4.2% (7%) more food (money) on the sooner payment date when the decision is made on that day than when it is made in advance. We see individual measures of time preferences are moderately correlated across reward types. Our experimental measures of time preferences over money predict field behaviours (including BMI, alcohol consumption, smoking, and academic performance) better than preferences elicited over foods.

Published:

June 30, 2020