Time preferences between individuals and groups in the transition from hunter-gatherer to industrial societies

Abstract

Three societies, namely the hunter-gatherer, the agrarian and the industrial, represent the course of human history of cultural and economic development. In this course, each society exhibits distinct cultures and daily life practices that shape human behaviors and preferences, characterizing temporal actions and consequences at the individual and group levels. We examine individual and group time preferences and their relation across the three societies. To this end, we conduct a field experiment to elicit individual and group discount factors in three societies of Indonesia-(i) the fisheries, (ii) the farming and (iii) the urban societies-as proxies of the hunter-gatherer, agrarian and industrial societies, respectively. We find that both individual and group discount factors are the lowest (highest) in the fisheries (agrarian) society, while those in the urban society are in the middle. We also observe that the determinants of group discount factors differ across societies: members of the lowest and middle discount factors in a group play an important role in determining the group discount factor in the fisheries society, while only the members with the middle discount factor are key in agrarian and urban societies. Overall, our results suggest that individual and group discount factors non-monotonically change as societies transition from fisheries to agrarian and from agrarian to urban and that comparatively shortsighted people (the lowest and middle) are more influential than farsighted people in determining group time preferences.