Definitions for time preference
This page provides all possible meanings and translations of the word time preference
A measure of the preference a consumer has for enjoyment at a time in the future that is either more immediate or more remote.
In economics, time preference is the relative valuation placed on a good at an earlier date compared with its valuation at a later date. There is no absolute distinction that separates "high" and "low" time preference, only comparisons with others either individually or in aggregate. Someone with a high time preference is focused substantially on his well-being in the present and the immediate future relative to the average person, while someone with low time preference places more emphasis than average on their well-being in the further future. Time preferences are captured mathematically in the discount function. The higher the time preference, the higher the discount placed on returns receivable or costs payable in the future. The time preference that an individual exhibits at any given moment is determined solely by their personal preferences. As such, if one "prefers" to save his money but cannot do so in the present, he is still considered to have a low time-preference. One of the factors that may determine an individual's time preference is how long that individual has lived. An older individual may have a lower time preference due to a higher income and to the fact that he has had more time to acquire durable commodities.
Find a translation for the time preference definition in other languages:
Select another language:
Discuss these time preference definitions with the community:
Use the citation below to add this definition to your bibliography:
"time preference." Definitions.net. STANDS4 LLC, 2014. Web. 20 Oct. 2014. <http://www.definitions.net/definition/time preference>.