Different domains – Different time preferences?

Abstract

The vast majority of studies examining the relation between time preferences and health behavior have applied a measure of preferences in the financial rather than in the health domain. Most studies find a small but significant correlation. If time preferences for health and money are not the same, this can have substantial consequences for the reliability of these results. In the present paper, we set out to examine potential differences in time preferences between the two domains – money and health.Preferences over time were elicited using a stated preference matching method. Using a split sample design, the health domain was described in the context of back pain. Individuals were to match a certain sooner shorter period of pain relief against a later longer period of pain relief in the health domain, while the match in the financial domain was described as a match between a sooner smaller monetary reward and a larger later monetary reward. Data was collected through an online survey, distributed to a sample of members of fitness dk on the 7th of February 2016 and the 6th of March 2016 yielding a sample of 1687 members.In the analyses we assume quasi-hyperbolic discounting which allows us to estimate both a parameter measuring present bias and a parameter measuring impatience at an individual level. Our results demonstrate remarkably similar time preference estimates for both long term discounting and present biasedness. When analyzing differences between subgroups we observe small but significant differences between time preferences for women, retirees and individuals with a longer education.Our results shows that time preferences measured in the money and health domain in our sample are close to identical but that small differences occur in certain subgroups.