Ruggeri, K., Panin, A., et al. (2021, October 1).
psyarxiv.com
https://doi.org/10.31234/osf.io/2enfz
Abstract
Economic inequality is associated with extreme rates of temporal discounting, which is a behavioral pattern where individuals choose smaller, immediate financial gains over larger, delayed gains. Such patterns may feed into rising global inequality, yet it is unclear if they are a function of choice preferences or norms, or rather absence of sufficient resources to meet immediate needs. It is also not clear if these reflect true differences in choice patterns between income groups. We test temporal discounting and five intertemporal choice anomalies using local currencies and value standards in 61 countries. Across a diverse sample of 13,629 participants, we found highly consistent rates of choice anomalies. Individuals with lower incomes were not significantly different, but economic inequality and broader financial circumstances impact population choice patterns.
Technical Abstract
Economic inequality is associated with extreme rates of temporal discounting, which is a behavioral pattern where individuals choose smaller, immediate financial gains over larger, delayed gains. Such patterns may feed into rising global inequality, yet it is unclear if they are a function of choice preferences or norms, or rather absence of sufficient resources to meet immediate needs. It is also not clear if these reflect true differences in choice patterns between income groups. We test temporal discounting and five intertemporal choice anomalies using local currencies and value standards in 61 countries. Across a diverse sample of 13,629 participants, we found highly consistent rates choice anomalies. Individuals with lower incomes were not significantly different, but economic inequality and broader financial circumstances impact population choice patterns.
Bottom line: This research refutes the perspective that low-income individuals are poor decision-makers.
