09:30 - 11:00
Sat-PS7
Chair/s:
Agnieszka Tymula
Room: Floor 2, Edifer
Arif Anindita - Time Preference and Fertility: A Causal Evidence from Indonesia
Ferdinand Vieider - Noisy coding of time and discounting for money
Agnieszka Tymula - Quasi-hyperbolic present bias: a meta-analysis
Time Preference and Fertility: A Causal Evidence from Indonesia
Arif Anindita
University of Insubria, Italy
Children can be seen as investments as future insurance during retirement. Raising children is not free. There is a cost to having children such as the cost of education and child-related expenditure). Thus, the family should consider the present cost and future benefits of having children. This brings us to the inquiry about the relationship between patience (delay current consumption for future consumption) and fertility. If a family is more patient, the more children they want to have since their belief about future benefits is higher than the total cost of raising children. Current literature shows there is a relationship between patience and fertility. However, they do not provide causality. The main issue of getting the causality is reverse causality. Patience not only affects the preference to have more children. The desire to add more children induces people to be more patient. There is a way to solve it by conducting a lab experiment. However, the result cannot be generalized for the general population. Our analysis uses Indonesia -a large, populous Muslim country- national representative survey dataset to analyze the effect. The survey conducted an experiment on the field for observing behavioral attitudes including patience. The treatment group gets a set of questions about time preference using 5 years period before answering a set of questions about time preference using 1 year period. We call it the familiarity effect that has been discussed in psychology literature. Using a randomized treatment status, we found a familiarity effect of the game on patience. We employ the status of the treatment as an instrumental variable to predict the degree of patience. The sample in our study is married women of reproductive age. Our analysis provides a piece of evidence that there is a positive impact of patience on women's preference to have more children. The effect is driven by an increasing preference to have more male children. 2.5 standard deviation point increase in the degree of patience, increase women's preference to have 1 additional son. The effect is tripled in rural areas. We find no effect of patience on the preference to have more daughters.