UCD CENTRE FOR ECONOMIC RESEARCH WORKING PAPER SERIES 2008 Psychological and Biological Foundations of Time Preference: Evidence from a Day Reconstruction Study with Biological Tracking

This paper considers the relationship between the economic concept of time preference and relevant concepts from psychology and biology. Using novel data from a time diary study conducted in Ireland that combined detailed psychometric testing with medical testing and realtime bio-tracking, we examine the distribution of a number of psychometric measures linked to the economic concept of time preferences and test the extent to which these measures form coherent clusters and the degree to which these clusters are related to underlying biological substrates. The paper finds that financial discounting is related to a range of psychological variables including consideration of future consequences, self-control, conscientiousness, extraversion, and experiential avoidance as well as being predicted by heart rate variability and blood pressure. *Corresponding Author: Liam Delaney, Room B102 UCD Geary Institute, UCD, Belfield, Dublin 4, Ireland. Email: [email protected]. We would like to acknowledge the contribution of Dr. Peter Doran and the clinical research nursing team at the Mater Misericordiae University Hospital: Jacqueline Breiden, Ann Marie Mulligan, Marcella Nunan, Marie Burke, and Eileen O’Connor. We are also grateful to Dr. David Murray, Brendan Igoe, and the laboratory analysis team at the UCD Clinical Research Centre. Thanks to James Heckman, Johan Mackenbach and seminar attendees at UCD, Oxford, ZEW Mannheim, and the MESS annual conference for comments.