Time ≠ Time ≠ Time: Mental Temporal Accounting

Abstract

Time tacts life. While not everyone has money and access to financial resources is unequal, all humankind has equal access to time. In the ample literature on mental accounting in the finance domain, the scarce resource time has not been tested though. Regarding monetary gains, individuals were shown to hold mental accounts dependent on a reference point but also in regards as to how to allocate money to causes individuals care about. This article builds on the behavioral economics idea of mental accounting, which is then tested in the domain of time with special attention to the reference points of age and parenthood. After a meta-analysis of the American Time Use Survey of the Bureau of Labor Statistics that found that there is no clear account of how much time individuals spend in social, economic and environmental conditions; three studies were conducted using Amazon Mechanical Turk (MTurk) online that tested 565 subjects from around the world. Over all subjects, time is reported to be used differently for social, economic and environmental purposes. The social, economic and environmental time use varies over mental temporal accounting compartments of a day, week, month, year and decade. Social time was defined as time spent with other people and engaging in social interaction, communication or activities with others. Economic time was meant as time spent using one’s labor power and productive capacity, likely to earn money and be or prospectively be a productive part of the labor force. Environmental time was given as time spent ourdoors in the open environment. While there are no gender differences to report; age groups and parenthood make a difference when it comes to time allocation perceptions in the social sphere and the environmental domain. Time allocation depends on the economic, social and environmental context. In the environmental frame, time use is assumed to be the highest over all categories. Then follows time use perception of those subjects in economic mindsets. Lastly, in the social condition, time use is perceived to be the lowest, even lower than the neutral baseline condition. All results hold invaluable insights on incentives to nudge individuals into benevolent time use and use external cues to motivate positive change. Elucidating how contexts and experiencing critical life stages influence temporal activity allocation choices hold manifold implications to improve decisions on education, health, asset management, career paths and common goods preservation throughout life. The found differences of social, economic and environmental cues impacting on temporal discounting but not social, economic and environment monetary allocations demand for future investigations of the relation of mental temporal discounting and financial allocation preferences. Contrasting orthodox temporal discounting with heterodox multi-faceted decision making approaches that elucidate more exactly how individuals choose to spend time in the course of their lives but also shedding light on the importance of integrating backward looking aspects in discounting sets the stage for improving future social care beyond one’s own existence in a real-world relevant way granting opportunities to imbue eternal equity in humankind.