I object to the notion of a pure rate of social time preference, on the basis that it’s epiphenomenal. People and organisations do in fact have time preferences, but IMO they are far better explained by a combination of factors such as:
Opportunity costs, especially compared to compounding returns on the earlier option
Probability of payoff decreasing over time for a wide variety of reasons
Preferences that are simply incoherent, i.e. violating VNM-rationality and subject to dutch-booking
I have never seen an example of pure-time-preference—outside of a thought experiment—which couldn’t more naturally be explained in terms of impure time preference. For example:
I would prefer a more severe disease (much) later, if I anticipate only a small chance of living that long
I would prefer less money now to more later, if I don’t trust you to deliver later
I would prefer less money now to more later, if I can make more by investing the earlier payoff
I would choose ten lives today over one million lives in 500 years because I don’t believe the latter claim is credible
I object to the notion of a pure rate of social time preference, on the basis that it’s epiphenomenal. People and organisations do in fact have time preferences, but IMO they are far better explained by a combination of factors such as:
Opportunity costs, especially compared to compounding returns on the earlier option
Probability of payoff decreasing over time for a wide variety of reasons
Preferences that are simply incoherent, i.e. violating VNM-rationality and subject to dutch-booking
I have never seen an example of pure-time-preference—outside of a thought experiment—which couldn’t more naturally be explained in terms of impure time preference. For example:
I would prefer a more severe disease (much) later, if I anticipate only a small chance of living that long
I would prefer less money now to more later, if I don’t trust you to deliver later
I would prefer less money now to more later, if I can make more by investing the earlier payoff
I would choose ten lives today over one million lives in 500 years because I don’t believe the latter claim is credible