Quantifying Future Time Orientation

In a 2010 paper on time preferences*, the authors Mei Wang et al. conducted an experiment in which participants could choose either $3400 now or $3800 a month later. Now I would choose the latter option but maybe it’s just because I’m intelligent and have been living in the West for quite a while. In other countries this is not the obvious choice however.

We see the usual correlates. Countries that are richer; more Germanic; less corrupt; more intelligent – they all have more future time orientation. In countries that have a Communist legacy future time orientations are perhaps lower than we might expect them to be otherwise.

This all of not insubstantial relevance because time preference can have an impact on economic structure and social life. For instance, as the paper notes, societies with higher future time  orientation are likely to devote more attention to the environment. They are also likely to devote a greater share of their GDP to R&D.

There are some other intuitions we can make. In societies were more people are prepared to wait for more money we can expect savings rates to be higher. The structure of the economy will likely be more tilted towards things like hi-tech manufacturing (which requires a ton of R&D and capital) and less towards say IT (in which you can launch a start-up with just a small group of programmers) or resource extraction.

Confirming all the stereotypes, the Germanic peoples (Germany, Austria, Switzerland) were at the very top of the charts. This is ingrained in culture (and perhaps genetics to some extent?) because even gifted Americans were less likely to choose to wait than even the average German: “Even for the students from Princeton University, the percentage choosing the patient option is lower than the percentage of German students (80% vs. 89%).

The Israelis have high future time clocking in at 80%. I would not be surprised if this rises to 90% among Ashkenazi Jews. A similar proportion of Czechs (basically Germanized Slavs) also choose to wait (the word “robot” came into English from the Czech word for laborer).

About 70% of Americans and Brits would choose to wait. However, there is no Anglo unity on this question – the rate for Australian and Kiwis is much lower at about 50%. Why the discrepancy? There’s the old trope about Australia being a nation of convicts, who tend to have low future time orientation, but less than a quarter of Australians are actually descended from exiled criminals. Surely other factors are at play. Maybe it’s a function of Australia’s resource wealth, much of which is shipped off to China without even being refined to add value. Sounds pretty short-termist to me. From what I observed its infrastructure also leaves a lot to be desired.

China clocks in at 60%, considerably lower than 70% in Taiwan, Korea and Japan, and 80% in Hong Kong. Confucianism has always praised foresight: “If a man take no thought about what is distant, he will find sorrow near at hand.” Surely this gap can be ascribed to the Maoist legacy.

In Spain, Greece, and Italy only 45% would choose to wait – less than a majority. No wonder they are always running up debts and devaluing… except that now it is no longer a straightforward option.

Less than 40% of Russians would choose to wait. Note that we are talking about the late 2000’s now so immediate economic instability and inflation are no longer germane factors in the decision on whether to get $3400 now or $3800 later. Part of it I suppose is the Communist legacy but knowing what I know of Russia I cannot imagine this figure ever having been a lot higher. Russians are a lot more impulsive and short-termist than their IQ would indicate. This low future time orientation is reflected in realities such as the high rate of corruption, the limited success of manufacturing enterprises, and the greater relative success of services and IT.

Low future time orientation also calls for a strong state capable of correcting these quintessentially Russian deficiencies. After all many things have to be developed over a time period longer than most Russians’ wallets to bear fruit: Infrastructure, industrial policy, stabilization and “rainy day” funds of all sorts, etc. No wonder that a coherent state in Russia only arose once the arguing tribes invited the Varangian (Nordic) Rurik to come rule over them, and the outstanding success of Germanic-influenced rulers (Peter the Great, Catherine, Putin) at improving the country in general.

As for Nigeria there is no hope. Future time orientation appears to be so low (<10%) that it would predominate even among the elites. Angola on the other hand has pretty respectable future time preference. Maybe that is why southern African countries like Angola itself along with Botswana have constructed pretty respectable states that benefit the people with oil/minerals revenue, while the likes of Nigeria and Equatorial Guinea wallow in poverty and total corruption. Basically their entire ruling elites are kleptocracies.

* I came upon this while trawling through GNXP archives. Here is Razib’s analysis.

PS. Can compare and contrast with Money Mania, By Country.


  1. Jennifer Hor says:

    I think there’s a typo in that first sentence, it should read $3400 now or $3800 in another month being $3400 plus interest earned, or something similar. Then it makes more sense.

    Interesting that people living in cold-climate countries with strong Protestant or Confucianist traditions that emphasise the work ethic have a future-oriented outlook. Belief in self-help and individualism versus the belief in collective action and that the group is more important than the individual make no difference.

    The discrepancy between North Americans and the British on the one hand and Australians on the other might arise because there’s a strong Irish influence on Australian society and Irish culture, being traditionally Roman Catholic and with a long history of foreign rule, poverty and rebellion thwarted by oppression, focused on people enjoying life now while they could because tomorrow could be worse. I don’t know about Kiwis as New Zealand wasn’t founded as a convict society and some cities there pride themselves on being very English (Christchurch) or Scottish (Dunedin).

    • Thanks, fixed.

      Ireland by the way is virtually identical to the US/UK on the chart so I’m not sure that can be a very relevant explanation. 🙂

      Belief in self-help and individualism versus the belief in collective action and that the group is more important than the individual make no difference.

      This is what they wrote on future time orientation relative to other national character traits:

      After controlling the macro-economic variables (GDP per capita, growth rate, inflation rate), participants from countries with higher degree of Individualism and Long Term Orientation are more likely to wait. In contrast, for the present bias and long-term discount factor, the country with higher Uncertainty Avoidance score tend to discount the next year more.

      Individualists actually have longer time orientations. Uncertainty avoiders want it all know. (There’s always the possibility that the offer will be withdrawn, or something).

      • Jennifer Hor says:

        I noticed that the Scandinavian countries rated highly on future time orientation. Denmark and Sweden are societies that privilege groups over the individual and where the Jantelov mentality might still be strong. South Korea and Japan also have a strong future orientation and these traditionally are not very highly individualistic societies; they have been and perhaps still are societies that stress individuals’ obligations and responsibilities to others in tight social hierarchies and networks.

        Curiously Slovenia and Lebanon rate about the same in future time orientation yet Slovenia was ruled by the Austrians for hundreds of years and must be a very Germanised society while Lebanon was ruled by the Ottomans for hundreds of years and then the French for 20 years. Lebanese society is premised on the interests of different religious groups being balanced, reflected in their politics in which the President is Maronite Christian, the Prime Minister is Sunni Muslim and the Speaker of Parliament is Shi’ite. So the Lebanese should have more in common with southern Europeans, Russia, Georgia and other countries with several ethnic and religious groups – but they don’t.

        I read the Razib article and noticed that some of the comments below it mentioned that in countries that scored high on future time orientation, the level of trust in these places’ social, economic and political institutions is very high. As one commenter observed, individuals can’t plan for the long term if they can’t trust others not to steal or take advantage of their efforts or if they don’t believe that society will stay orderly and secure with everyone minding their manners when harvest-time comes around and it’s time to collect. So we have the paradox that belief in individualism and ability to plan for the future and set aside resources for it are contingent on society and its institutions being stable and trustworthy.

        • I commented on Razib post before. This study is really not good measurement of future orientation. There are too many factors which can change the result. Like I said below, german would choose money now during hyperinflation of 1923. Only idiot choosed devaluated money next month.

  2. Apparently time preferences are in line with future time reference in the language spoken (although I’m not sure which way the causation lies)

  3. I would say that historic instability in Russia still gives strong negative influence – Russians don’t like to keep money in the bank, they would rather NOT pay for things in advance (relevant to both businesses and consumers), clearly social trust is low. On the other hand Russian certainly do have low future orientation, otherwise why would they drink/smoke so much? 🙂

  4. One major factor here is inflation rate. If you live in a high inflation country, better take your money now and invest it in asset that is inflation resistant. If inflation is less than raise rate, one should take waiting for higher income. It is matter of simple math.
    I am sure that German would take different choice in 1923.

  5. It’s interesting that the 3 most future-oriented post-commie countries were all under German cultural or political influence for centuries (Czech Rep., Estonia and Hungary).

  6. Depends to much on the country and its environment. In Germany i would take the 3800 next month. In Nigeria i would take the 3400 this month

    • Yup,

      The average Nigerian likely needs money more urgently than the average German. That’s one factor that cannot be discounted.

      • I would guess that NBA stars go bankrupt several times more more often than white cops or Asian dry cleaning place owners. Black movie, music and sports stars seem to go bankrupt not just more often than their white counterparts, but more often than lower middle class whites or Asians. Just looking at my co-workers, most of whom have similar incomes, I know who splurges on short-term gratification (expensive sneakers, flashy clothes, drugs) while asking to borrow $5 to pay for lunch the day before payday and who’s using dumb flip phones and bringing their own home-cooked food to the office because that’s cheaper while saving up to buy a house without a mortgage, by just writing a check. The demographics are very predictable. Blacks are at one extreme, Chinese and Indians at the other, whites in the middle.

        • Hey, I said it was a factor; not the only factor.

        • …although your comparison is a bit unfair. A lot of money tends to have that certain effect on many people whereby they get carried away in how they spend it. Their foresight becomes clouded with the idea that they can have anything.

          It’s fair to say that cops and dry cleaners, regardless of their race, earn just modest incomes, and, thus, can’t afford to recklessly spend their earnings away like those celebrities. They are less risk averse, so to speak.

          I’d have a few thousand dollars in my savings account if I had a dollar for every time I hear that a multi-million dollar lottery winner has filed for bankruptcy.

          • I think there is a white/black difference in recklessness with money at every income level. Working class blacks save less and go bankrupt more than working class whites. I’ve learned this by observing real people. Rich blacks save less and go bankrupt more than rich whites. I’ve learned this by following the media. In both cases the black/white difference is huge.

      • I didn’t say if i was a Nigerian i would take the money, i said i would take the money in Nigeria. The place is much to “fluid” to leave money in the “bank”. I’m not even using the fact that $3400 for the average Nigerian is probably the same as $34000 for a German.

        • It’d still take the $38k later over the $34k now.

          And if it was a million.

          If it was a billion I’d probably take the $3.4bn now but that’s too fantastical to have any relevance.

          • But $38k is an amount that is hard to save while $3400 is not going on holiday and as such easier to loose so people will make more rational decisions.

            But shows like Deal or No Deal show that economics is wrong with respect to how people should behave. I would even argue that the answer is not the natural answer people give but the learned propaganda answer they have been filled with. I have so my doubt on what the actual behaviour of the nationalities are?

  7. The HBD community is really focused on IQ, and yes, IQ is important, but there are lots of other important group differences. Mexicans, SE Asians, lower-class East Indians (the sort of people who drive cabs and sell newspapers in NY) might have similar mean IQs to US blacks, but the feeling you get from dealing with them is utterly different from the feeling you get when dealing with blacks. Self-control, self-discipline don’t correlate with IQ extremely well. There must be a positive correlation, but it’s not a strong one. Lower-class East Indians have A LOT of self-discipline. Same with SE Asians. Mexicans have far, far more self-discipline than US blacks. The vast majority of the population, well over 95% (me included), never do anything at work that requires any sort of deep thinking. Outside of rocket science and the like the quality of the work done mostly depends on the altruism and self-discipline of the work force, not on IQ. The Chinese have a lot of self-discipline, but not a lot of altruism. To me the questions about deferred gratification are about self-discipline. Does a man follow every whim, or does he actually get a kick out of denying himself stuff, does he get a positive feeling after forcing himself to do things? Mexico is above Spain on that graph – that doesn’t surprise me at all. Spaniards have a higher IQ, but Mexican Indians have more self-control, better work ethic. Neither group is very high on altruism, though I would guess that Spaniards are higher.

    • Communism is based on human altruism. Capitalism is based on human natural selfishness (adam smith, nation of shop keepers). Feudalism is based on human as semi-domesticated ahimals. Slavery society is based on human as captured animal.

      Certain culture has affinity to some ideology which might appeal to their nature. Any judgement based on personal bias can be easily wrong. Without altruism, Chinese will never have a chance with Korean War.

    • That’s were religion and/or culture come into play. The difference between, say, the Indian and Mexican immigrants and African Americans is that, with the latter, you have a culture greatly promotes/accentuates those negative behaviors that a low IQ would suggest, whereas with the former two you have cultures that help suppress those behaviors.

      But that doesn’t necessary mean you have to be less wary around Indians or Mexicans.

      • Indians and Mexicans are first generation immigrants. First generation immigrants will work 90 hour work weeks even if they can life comfortable on 40. That isn’t true for others outside a very few cultures who strangely aren’t that successful financially.

        • Yea, even after taking into account the Flynn effect, these second generation immigrants will likely be less like their first-gen counterparts with regards to their explicit behaviors, their work ethic and whatnot, partly thanks to the influence of the host culture.

          • Has absolutely nothing to do with host culture. Only with being the typical first generation emigrant

      • Where does culture come from? 1) Hereditary dispositions. 2) Inertia, the persistence of learned habits. This persistence can’t possibly be very high. If a behavioral pattern persists for a thousand years, I’m ascribing it to 1), not 2), to nature, not nurture.

      • An old example of the difference in the attitude to work and to money between East Indians and Africans:

        In the early 19th century the British government outlawed slavery in its possessions. When black slaves were freed in the Caribbean, British plantation owners were faced with a problem: blacks didn’t want to work for money. They could subsist off the land, and did not want cash, more precisely they didn’t want to work for cash. The plantation owners had to import Indians from half a world away to work for them for cash in Guyana and Trinidad. I think that a bit more than half of the population of those two countries is now East Indian.

        Ethnic stereotypes about attitudes to work tend to persist for centuries, and where long-term records are available, sometimes for millenia. The longer they persist, the harder it is to ascribe them primarily to inertia of learned habits, to pure culture.

        • There is a reason why sugar plantation are worked at by slaves. It is hellish work especially without rubber booths/gloves. If you don’t have to then it is only sensible to not work the sugar fields.

          The environment (disease and temperature) are probably a better explanation for why those stereotypes persist

    • You are talking about the difference between first generation immigrants and locals. Their way to seek status is very different. Your classmate who is still in the Punjab doesn’t know you have an iphone, your classmate from the Bronx can see it.

  8. ironrailsironweights says:

    Lebanon is surprisingly high, Chile surprisingly low.

  9. Promise is a comfort to a fool. Between money in your pocket and a promise there is no question. In many places a promise of $3800 next month is worth about 50 dollars. Taking the promise is akin to gambling, the conservative and sane option is taking the banknotes. It shows more that some people are realistic and conservative while others are naive and live with their heads in the clouds and their heads up their asses.

    But hey, as long as the “russophile” author gets to make another post on how the Russians are dumb (at least compared to him!), and childlike and therefore in need of a strong hand, perhaps maybe even his own since he is intelligent and has lived in the West (oooh, I’m impressed)! I say Fuck Putin, what we really need for Russia is a nice Judeocracy — getting all the naturally intelligent people, who according to Karlin incidentially happen to be mostly Jewish, again incidentially like himself, to set up a benevolent paternal autocracy over the masses of less-intelligent, low-time preference Russian muzhiks.

    Nice one on the Czechs too. Tell a Czech patriot his society is germanized to his face and we’ll see if you get to keep your teeth. But hey what would this place be without the pretense of knowing everything in an instant.

    • You are not allowed to insult me here. Acquaint yourself with the Comments Policy. Do it one more time, and you will earn the dubious distinction of being the first commentator to get banned here.

      PS. Anyhow I’m not even Jewish.

      • I’m glad you feel insulted.

        PS. I don’t know what you are now. I know you said you were part of Russian Jewish emigration when you started blogging.

        • Wrong. I don’t feel insulted. Why should I feel insulted from what some loser who has nothing better to do than troll my blog has to say? Doubly wrong. I never said that. I explicitly stated I was an egghead emigre / Putin’s expat.

          Oh and you’ve had enough warnings. Banned.

  10. Dostoyevsky wrote a brilliant comment about this in his story the Gambler, contrasting German savers with Russian impulsive spenders.

    My wife thinks that Russians are not willing to wait not out of impulsiveness necessarily, but lack of trust. Wait, and who knows if you will really get anything?

    • Seeing everything you worked and saved for go up in smoke due to wars, revolutions, and arbitrary gov’t actions over the last century must have something to do with it.

      • That explains why Germans don’t save, but what about Russians.

      • Scowspi, I doubt most people have that long of a time perspective. 🙂

        I mean do I or should I care a damn about the Revolution or WW2 when investing in Russia. No of course not. Even 1998 is largely irrelevant as current circumstances are radically different. I pay attention to the lessors learned in 2008-9 and the bubble that preceded it, but that is, for the most part, as far back as my perspective goes.

  11. Well the Germans had the Thousand Year Reich that was future orientated. That played out well for them.

    I lived near Malmo in 2009, my wife having been born and raised in Lund. I arrived just in time for the Davis Cup tennis match between Israel and Sweden. Due to “safety reasons” no fans were allowed to enter the stadium and watch the games. Malmo is now approaching 50% foreign born. I travelled around Sweden and then Norway before the Breivik madness. Fabulously future orientated there. I guess if your aim is constant friction and war the current Scando policies are sensibly future orientated.

    Poor wretched Australia filled with slacked jawed ex-convicts how will they ever manage with their eugenic immigration program and other short term policies? Their infrastructure for processing dodgy refugees is appalling. Somehow these dumb bastards are 2nd from the top in the UN’s Human Development Index and they have one of the highest life expectancies. Just fell in their laps lucky bastards.


    • Immigrants are concentrated in cities and are often to poor to live in the suburbs. So 50% for Malmo doesn’t say anything

      • It says 50% and rising are foreign born in Malmo. If you are ok with that fine. It’s not my fight. At one stage Sydney Australia was 50% British, 50% Aborigine. Many of the British were too poor to leave Sydney but eventually….they did. Not so good for the aborigines in the end.