Time and inequality - A study of individual preferences

This thesis consists of three papers that study individual preferences. The focus of the first two papers is on time preferences. In the third paper, preferences regarding how inequality in health and income should be defined are elicited.In the first paper, we study the long-term stability of survey-based subjective time preferences using a Dutch household survey panel. We find that while the individual ranking of survey-based subjective time preferences is stable over time, there are considerable shifts in the aggregate over time. To shed light on the observed instability, we first study whether the observed shifts can be explained by shifts in the socioeconomic situation of individuals over the period studied, but find no evidence supporting this. We then study whether the macroeconomic situation at the regional level explains the variation in the aggregated subjective time preferences. Our findings show that economic growth is positively correlated with patience, while income inequality is negatively correlated with patience. Moreover, we find considerable heterogeneity in the relationship between the macroeconomic situation and the survey-based measure of subjective time preferences across income groups.In the second paper, we utilize experimental methods to investigate whether time preferences are context-dependent. More precisely, we study whether time preferences are affected when the cognitive demands of multitasking increase. In our within-subject laboratory setting, multitasking is present in both the treatment and the control tasks and consists of secondary tasks that pop up, demanding subjects' attention from time to time. The secondary tasks are easy in the control group but difficult in the treatment group. The novelty of this paper is that it studies how time perception and cognitive capacity mediate the effect of multitasking demands on time preferences. Results from experimental psychology show that time is experienced as passing quicker when people are cognitively busy. As a result, people ...