Sunday, May 23, 2010

A Matter of Time Preference?

I have read or heard a number of stories about hoarding, lately. This issue seems to have caught the attention of the media. I concur it can be a debilitating problem. My family will also accuse me of hoarding on some level, as I get rid of very few books, and I keep a lot of my old papers (it's the undergraduate history major in me, I'm afraid.) I also sense an opportunity to illustrate an economic concept: time preference.

Time preference is about how we view consumption. People with relatively high time preference prefer to consume in the present. People with relatively low time preference will postpone some amount of consumption in exchange for consuming in the future. Thus, the individual's time preference is somehow related to their propensity to save/consume - which sets us up for this cartoon.

Moderately Confused

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