An International Survey on Time Discounting

We present results from an international survey on time discounting in 45 countries/regions. Consistent with the pattern predicted by the hyperbolic discounting model, most participants discount the near future more than the long-term future. The tendency to wait and the subjective discount rates are highly heterogeneous on a cross-country level and this cannot simply be explained by economic variables such as interest or inflation rates. The measured level of time discounting is correlated not only with factors like the wealth level of the countries, growth rate, and education, but also with cultural factors like individualism, uncertainty avoidance and long-term orientation. Within-country variation of time discounting is high as well. It seems that time preference is also related to loss-aversion and risk preferences at the individual level. Further results suggest that differences in time discounting between countries can be used to predict some macroeconomic phenomena, as we demonstrate on the examples of innovation and environmental preservation.