Study of Intertemporal Discounting According to Income Group, Savings, and Loans

The paper deals with the issue of intertemporal discounting from the perspective of income groups, savings, financial reserves, and loans. The study included a total of 599 individuals with an average age of 38.3 years (min. 16 and max. 82 years) who answered classical questions focused on time discounting and impulsive behaviour. In total, four possible scenarios were analysed: a small reward (CZK 100) with a delay of 1 day, a small reward with a delay of 1 month, a large reward (CZK 100,000) with a delay of 1 day and a large reward with a delay of 1 month. The delayed reward was always increased by 10% (i.e., CZK 110 or CZK 110,000). Using the three hypotheses, the analyses confirm that individuals with extremely low incomes have savings only in 26.4% of the cases, while individuals with the highest incomes have savings in 92.2% of the cases (p=0.0000). Furthermore, it was revealed that individuals with savings are approximately 1.7 times more likely to have higher patience than individuals without savings. Individuals with a financial reserve are approximately 1.9 times more likely to have higher patience than individuals without a reserve. Finally, individuals with no debt are 1.6 times more likely to have higher patience than individuals with debt. The paper also complements the conclusions with three reserve bands of subjective discount rates for the examined groups of individuals. The results have implications for the financial management of individuals and thus for defining the risk of poverty.