Non-technical summary:
People often fail to exert self-control and instead prioritise immediate pleasures over long- term benefits. In behavioural economics, these self-control problems are frequently modelled using quasi-hyperbolic discounting, which assumes that individuals have a “present bias” towards current consumption over future consumption. Although quasi-hyperbolic discounting is widely used, the literature has not produced consistent evidence to support the existence of present bias, calling for a re-examination of the available evidence.
In this paper, we report a meta-analysis of estimates of the present-bias parameter (a parameter that indicates the weighting of future rewards compared to current rewards) based on searches of all major research databases. The final dataset includes results from 62 papers with 81 estimates in total, including papers that use monetary rewards and papers that use non-monetary rewards such as food or health outcomes.
We find that people are, on average, present biased for both monetary rewards and non-monetary rewards but that there is significant variation across studies. We find that estimates of present bias vary systematically with study characteristics: present bias is stronger in the general population compared to university students, in studies using bank transfers for payments compared to using cash, and in North American participants compared to European ones. Whether choices are hypothetical or incentivised with real rewards has no significant effect on estimates of present bias.
Given our finding that present bias systematically varies with the characteristics of participants, it is possible that the inconsistency in the literature could be explained by the sample selection used in some studies. Studies that found no or weak present bias could simply have selected participants that do not have self-control problems. Present bias affects individual decision making across health (e.g. eating versus exercising), finances (e.g. saving for retirement versus consuming now for pleasure), and work/education (e.g. sticking to a schedule versus procrastinating). In particular, evidence shows that disadvantaged people are more likely to suffer from present bias, which could trap them in a cycle of poverty. Thus an understanding of present bias is important for policy development in these areas and in tackling the deep and persistent disadvantage.