Did households’ time preference change due to the Great Recession?

ABSTRACT

Household time preference for US households, as measured by the planning horizon, was fairly stable for many years, but sharply changed with the onset of the Great Recession. Based on an analysis of a combination of the 1992–2013 Survey of Consumer Finances (SCF) datasets, time preference increased in 2010 and remained high in 2013, indicating households were less patient after the onset of the recession. This pattern held up even after controlling for household characteristics.

KEYWORDS:

• Planning horizon
• time preference
• Great Recession
• Survey of Consumer Finances

JEL CLASSIFICATION:

• D14
• D91

Disclosure statement

No potential conflict of interest was reported by the authors.