Subjective Wellbeing and the Discount Rate

Abstract

Academic and policy interest in the determinants of subjective well-being continues to grow. To date, the role of temporal discounting—the extent to which people devalue future rewards—in people’s reports of their subjective well-being has remained unexplored. This paper is the first to provide evidence on the relationship between discount rates and evaluative and hedonic subjective well-being. Using data from a nationally representative sample of 2000 UK respondents in multiple regression analyses, the results suggest that people who devalue future rewards are less satisfied with life and less happy than those who place greater value on future outcomes. However, those who discount heavily are also more likely to expect that they will be happier in the future.