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Time Preferences and Lunar New Year: An Experiment

  • Tam L. Nguyen , Bryan S. Weber and Luu Duc Toan Huynh EMAIL logo
Published/Copyright: July 22, 2024
The B.E. Journal of Economic Analysis & Policy
From the journal The B.E. Journal of Economic Analysis & Policy Volume 24 Issue 4

Abstract

We conduct an experiment to examine how the attitude toward time preference changed when there was a time-related occasion, specifically the Lunar New Year. We anticipated that individuals would be more patient as measured by a battery of questions after the New Year. However, we find that individuals only appear more patient when those questions pose the amount of time they have to wait in year increments rather than other units of time. More experimentation is necessary to identify the peculiarities of framing questions around this “New Years Effect.”

Keywords: difference-in-difference; Lunar New Year; time preferences
JEL Classifications: D11; D90
Corresponding author: Luu Duc Toan Huynh, Department of Business Analytics and Applied Economics, Queen Mary University of London, London, UK, E-mail:

Acknowledgments

We are grateful to Daniel Houser, Mika Akesaka, Mark Schneider, and conference as well as seminar participants at the ACBES 2022 conference (Vietnam), 2023 Vietnam Economist Annual Meeting (Vietnam), 2023 European ESA Meeting in Exeter (United Kingdom) for helpful comments. The experiment was approved by the University of Economics Ho Chi Minh City’s Institutional Review Board (with the registered number 230504). Bryan S. Weber obtain the research protocol 2023-0173-CSI for data sharing agreement.

  1. Research funding: This study was funded by the University of Economics Ho Chi Minh City (UEH) with the registered project number 2024-07-09-2357.

Appendix

(Tables A1, A6–A8)

Table A1:

Summary of descriptive statistics.

Variables Explanation Mean SD
DE1 Year of birth 1999 4.09
DE2a Gender (male = 1) 0.35 0.48
DE2b Gender (female = 1) 0.62 0.49
DE2c Gender (other = 1) 0.00 0.07
DE3 Family size 4.31 1.25
DE4 Family income (million) 32.525 34.1574
DE5a Religion (confucianism) 0.05 0.21
DE5b Religion (Buddhism) 0.64 0.48
DE5c Religion (Taoism) 0.02 0.15
DE5d Religion (Christianity) 0.12 0.33
DE5e Religion (Muslim) 0.00 0.00
DE5f Religion (Marxism) 0.04 0.18
DE5g Religion (Caodaism) 0.02 0.13
DE5h Religion (Protestantism) 0.01 0.09
DE5i Religion (Hoahaoism) 0.01 0.11
DE5j Religion (none) 0.32 0.47
DE5k Religion (other) 0.01 0.09
CR1 Cognitive reflection (lily pad) 0.67 0.47
CR2 Cognitive reflection (bat and ball) 0.90 0.29
CR3 Cognitive reflection (machine) 0.77 0.42
T1 Now or next year (wait = 0; now = 1) 0.53 0.50
T2 Now or next month (wait = 0; now = 1) 0.46 0.50
T3 ln (Equivalency) (the amount of money) 448,124 385,819
T4 Likert scale (0 – very unwilling; 10 – very willing) 6.98 2.14

  1. DE presents the demographic questions, including year of birth (DE1), gender (DE2), number of people in the family (DE3), the amount of monthly income in their family (DE4), and the religion or world view that the participants feel close to (DE5), where DE2 and DE5 are binary questions. CR1, CR2 and CR3 are the questions that reflect the cognition of the participants. These questions are also binary, with a value of 1 when the participants give the correct answer and 0 if the answer is incorrect. In detail, the CR1 question asks, “In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake? _________days,” CR2 question asks, “A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost? _________cents,” and CR3 question asks, “If it takes 5 machines 5 min to make 5 widgets, how long would it take 100 machines to make 100 widgets? _________minutes.” The T1, T2, T3, and T4 represent the four time preference questions as explained in Table 1.

Table A2:

The effects of Lunar New Year on time preference in “now or next month”.

Estimate 1 Estimate 2 Estimate 3 Estimate 4 Estimate 5
Event × treated 0.004 0.004 0.011 0.023 0.007
(0.04) (0.04) (0.11) (0.24) (0.10)
Time fixed-effect Yes Yes Yes Yes
Demographics Yes Yes Yesd
Cognitive questions Yes Yes
Respondent fixed-effect Yes
R 2 0.009 0.009 0.071 0.082 0.857
N 433 433 433 433 433

  1. a p < 0.01, b p < 0.05, c p < 0.1. This table shows the consequences of building to the final complete specification that includes all controls. dImplies a value has been absorbed. 433 observations represent participants who fully answered questions related to this type.

Table A3:

The effects of Lunar New Year on time preference in “ln (equivalency)”.

Estimate 1 Estimate 2 Estimate 3 Estimate 4 Estimate 5
Event × treated −0.068 −0.068 −0.077 −0.053 0.020
(−0.87) (−0.87) (−1.02) (−0.70) (0.89)
Time fixed-effect Yes Yes Yes Yes
Demographics Yes Yes Yesd
Cognitive questions Yes Yes
Respondent fixed-effect Yes
R 2 0.002 0.002 0.115 0.139 0.973
N 417 417 417 417 417

  1. a p < 0.01, b p < 0.05, c p < 0.1. This table shows the consequences of building to the final complete specification that includes all controls. dImplies a value has been absorbed. 417 observations represent participants who fully answered questions related to this type.

Table A4:

The effects of Lunar New Year on time treference in “Likert Scale”.

Estimate 1 Estimate 2 Estimate 3 Estimate 4 Estimate 5
Event × treated −0.042 −0.043 −0.160 −0.130 0.041
(−0.10) (−0.10) (−0.39) (−0.31) (0.17)
Time fixed-effect Yes Yes Yes Yes
Demographics Yes Yes Yesd
Cognitive questions Yes Yes
Respondent fixed-effect Yes
R 2 0.002 0.002 0.118 0.124 0.912
N 429 429 429 429 429

  1. a p < 0.01, b p < 0.05, c p < 0.1. This table shows the consequences of building to the final complete specification that includes all controls. dImplies a value has been absorbed. 429 observations represent participants who fully answered questions related to this type.

Table A5:

Time preference and Lunar New Year effect by different questions with hourly fixed effects.

Now or next year Now or next month ln(equivalency) Likert scale
Event × treated −0.165b −0.030 0.030 −0.005
(−2.69) (−0.43) (1.26) (−0.02)
Respondent fixed-effect Yes Yes Yes Yes
Time fixed-effect Yes Yes Yes Yes
Hourly fixed effects Yes Yes Yes Yes
Demographics Yes Yes Yes Yes
Cognitive questions Yes Yes Yes Yes
R 2 0.869 0.866 0.976 0.926
Observations 416 416 400 412

  1. a p < 0.01, b p < 0.05, c p < 0.1. We exclude all participants who did not fully answer and those who did not answer in our requested time.

Table A6:

Means of T1 by treatPeriod and treatGroup for those who choose to wait.

Control group Treated group
Before 0.544 (N = 79) 0.558 (N = 77)
After 0.574 (N = 134) 0.436 (N = 126)

  1. The δ for T1 is 1.0019.

Table A7:

Means of T2 by treatPeriod and treatGroup for those who choose to wait.

Control group Treated group
Before 0.417 (N = 79) 0.519 (N = 77)
After 0.418 (N = 134) 0.500 (N = 126)

  1. The δ for T2 is 1.0037.

Table A8:

The discount rate for T3 decomposed by treatment group and period.

Control group Treated group
Before 1.009 (SE = 0.0016) 1.010 (SE = 0.0015)
After 1.009 (SE = 0.0013) 1.008 (SE = 0.0011)

  1. Estimate δ as the mean of all discount rate estimates.

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Received: 2023-10-24
Accepted: 2024-07-05
Published Online: 2024-07-22

© 2024 Walter de Gruyter GmbH, Berlin/Boston

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https://doi.org/10.1515/bejeap-2023-0360
Keywords for this article
difference-in-difference; Lunar New Year; time preferences

Articles in the same Issue

  1. Frontmatter
  2. Research Articles
  3. Women’s Labour Market Attachment and the Gender Wealth Gap
  4. Terror in the City: Local Terrorism and Firm Exports
  5. Achievement Effects of Dual Language Immersion in One-Way and Two-Way Programs: Evidence from a Statewide Expansion
  6. Test Endurance and Remedial Education Interventions: Good News for Girls
  7. Patent Clearinghouse and Technology Diffusion: What is the Contribution of Arbitration Agreements?
  8. How Much Competition is Enough Competition for Regulatory Forbearance?
  9. Waiting for the Weekend – The Adoption and Proliferation of Weekend Feeding (“BackPack”) Programs in Schools
  10. The Effect of Inheritance Receipt on Labor Supply: A Longitudinal Study of Japanese Women
  11. Letters
  12. Time Preferences and Lunar New Year: An Experiment
  13. Outsourcing Child Labor
  14. Future Focus is Surprisingly Linked with Prioritizing Work–Life Balance over Long-Term Savings
  15. Inmate Assistance Programs
  16. On Plaintiffs’ Strategic Information Acquisition and Disclosure during Discovery
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