I wanted to share this interesting article about “time discounting” written by Robert M. Sapolsky in the Wall Street Journal.  I have discussed the “time value of money” before, but what about the “time value of time”?  This article is based around the idea that when people discount time, they may also discount the consequences of their actions.

Don’t underestimate the value of time itself.

It makes perfect sense.  Those who are more disciplined about anything in life will outperform those who are not.  For example, my banker brought me a box of See’s Candies today for a holiday gift.  I need to lose a few pounds but that didn’t stop me from eating two of them.  Darn it!  Those with more discipline about their diet will surely drop weight faster than me.  I chose to “discount time” by putting off my healthy eating until after those bites of candy.  So many of us do the same thing with saving and investing.  Putting money away for the future is not always fun or easy to do, but it sure is necessary.  And the earlier you start, the better.

I have struggled to get this truth across to my four kids.  Some of them get it, some of them don’t and at all different levels.  Even with the same parents, the same upbringing, and the same talks about money, they are all different people with their own personalities.  Enjoy the article. – Greg

 

A Criminal Trait in the Refusal to Wait?

‘Time discounting’ by children may predict trouble ahead

By Robert M. Sapolsky

It’s rare for a morally upright person to erupt suddenly into a crime spree. Instead, a first-time offender usually has a history of problematic behavior. But what type of questionable conduct early in life reliably predicts criminality?

One answer, as a recent research paper shows, is heavy “time discounting”—that is, the tendency to value something less if you have to wait for it. An extreme test of this trait would be giving someone a choice between getting one dollar right now or a gazillion dollars tomorrow. A singularly shortsighted response would be, “A dollar now! Heck, why would I be so stupid as to wait to get paid?”

Typically, those who refuse to wait don’t assess their choice very rationally. Cutting in half the delay for the big payoff, for example, does not double the probability that they will change their mind and wait.

In a paper published in May in the Proceedings of the National Academy of Sciences, David Åkerlund of the Swedish Institute for Social Research and colleagues examined this issue by analyzing an intriguing database. In 1966, more than 13,000 13-year-olds from Stockholm answered a survey that included a question about time-discounting (that is, how much they preferred a small reward today over a larger one in the future).

Based on their answers, about 6% of the teenagers qualified as the steepest time discounters, with the strongest preference for immediate reward. As it turned out, the individuals who found distant rewards less rewarding also seemed to find distant threats of punishment less deterring: Over the next 18 years, these youths were the subjects most likely to commit criminal acts.

The finding remained even after controlling for parental income and education. Importantly, steep time discounting particularly predicted criminality when it was coupled with low intelligence.

Time discounting now joins another well-recognized childhood predictor of adult antisocial behavior: lack of self-control. In this scenario, individuals are well aware of the better strategy and can even verbalize the benefits of postponing gratification—yet, at the last second, they impulsively grab for the cookie jar.

Starting in the 1960s, the psychologist Walter Mischel produced the classic studies of this behavior with the “marshmallow test.” A psychologist gives a kindergartner a marshmallow and says, “I’m leaving the room for a while. You can eat this marshmallow, but if you wait until I return, you will get a second marshmallow.” The psychologist leaves, and an observer secretly records how long the child can exert self-control, resisting the siren call of the marshmallow.

As more than 40 years of follow-up studies have shown, kindergartners with minimal marshmallow self-control are more likely than chance to have, later in life, low SAT scores, poor occupational success, high rates of obesity and problems with antisocial behavior.

This highlights an important distinction. The literature has generally shown that poor childhood self-control is a predictor of later violent crime—when that inner voice saying, “You will regret this” is swamped by an urge to strike a blow or use a gun. In contrast, the Swedish findings show that steep time discounting is a predictor of later property crime, where the immediate enjoyment of purloined goods outweighs the delayed cost in fines or lost freedom.

I should stress that these relationships are statistical, “on the average,” with plenty of individual exceptions. Police should think twice, obviously, before nabbing marshmallow-obsessed kindergartners or teens who are steep discounters.

Because sometimes those traits are predictors of criminality, and other times they are just predictors of, say, a lousy chess player.