Time preferences reflect how future outcomes are valued relative to present ones. Previous research has found that time preferences for one domain (say, money) are inconsistent (uncorrelated) with those from another (say, health). The present studies evaluated whether this domain independence was due to decision makers' sensitivity to a normatively appropriate principle about the tradability of health and money.
Participants read a scenario in which health and money were described as tradable or not tradable and then responded to hypothetical intertemporal trade-off questions. RESULTS. In experiment 1, participants showed higher agreement between health and money time preferences in the tradable condition, as predicted. In experiment 2, participants responded from either an individual decision maker or policy maker perspective. Perspective had little effect on agreement between health and money discount rates, but there was again higher agreement in the tradable as compared to the not-tradable condition.
Previous demonstrations of domain independence may have been due in part to decision makers' assumption that health and money are not tradable.