The agricultural origins of time preference

Here is a new paper by Galor and Özak, highly speculative of course:

This research explores the origins of the distribution of time preference across regions. It advances the hypothesis and establishes empirically, that geographical variations in natural land productivity and their impact on the return to agricultural investment have had a persistent effect on the distribution of long-term orientation across societies. In particular, exploiting a natural experiment associated with the expansion of suitable crops for cultivation in the course of the Columbian Exchange, the research establishes that agro-climatic characteristics in the pre-industrial era that were conducive to higher return to agricultural investment, triggered selection and learning processes that had a persistent positive effect on the prevalence of long-term orientation in the contemporary era.

Didn’t Irving Fisher once say something like this?  My view in contrast is that virtually everyone has a high rate of time preference, but some (wise) people can act like low time preference individuals by choosing the proper perceived rewards and benefits, for instance by courting approval from others for saving or waiting.  It may just be pretense, but who cares?  It is not unusual to see the same person switch rapidly from high time preference to low time preference modes of thought and behavior, and this to me suggests it is all about perceptions, environment, expectations, peer effects, and other social factors, rather than genes.  In other words, choose your framing wisely.

More broadly, there is a “brute fact” that one bunch of societies have a lot of correlated positive features, and another group of societies do not.  I don’t think we’ve gotten very far beyond that brute fact in terms of what we can infer from that distribution.

The original pointer to the article is from


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