Happiness and Time Preference: The Effect of Positive Affect in a Random-Assignment Experiment

Authors

John Ifcher, Santa Clara UniversityFollow
Homa Zarghamee

Document Type

Article

Publication Date

12-2011

Publisher

American Economic Association

Abstract

We conduct a random-assignment experiment to investigate whether positive affect impacts time preference, where time preference denotes a preference for present over future utility. Our result indicates that, compared to neutral affect, mild positive affect significantly reduces time preference over money. This result is robust to various specification checks, and alternative interpretations of the result are considered. Our result has implications for the effect of happiness on time preference and the role of emotions in economic decision making, in general. Finally, we reconfirm the ubiquity of time preference and start to explore its determinants. (JEL D12, D83, I31)

Comments

Copyright © 2011 by the American Economic Association.

Recommended Citation

Ifcher, John, and Homa Zarghamee. 2011. "Happiness and Time Preference: The Effect of Positive Affect in a Random-Assignment Experiment." American Economic Review, 101(7): 3109-29.