The value of patience
Exercise
Researchers offered adults in two villages of hunter-gatherers a choice between (1) receiving a small amount of money or food immediately, (2) getting a larger amount if they were willing to wait for a week, and (3) getting am even larger amount if they were willing to wait for several months. How would you expect willingness to wait to change with education? How should this affect individual incomes?
Analysis
The exercise is based on research made on the Tsimane’, a group of Bolivian Amerindians. Researchers found that the more educated villagers were willing to wait longer. Five years later, they found that those who had shown most patience had become slightly wealthier, growing 1% more each year. See “Patient capital (The Economist, February 8, 2007, pp. 84-86), reporting on Reyes-García V, Godoy R, Huanca T, Leonard WR, McDade T, Tanner S, Vadez V, 2007, “The origins of monetary income inequality: Patience, human capital, and division of labor,” Evolution and Human Behavior, 28(1), pp. 37-47). Traditional subsistence economy depends on folk knowledge and learned skills that pay-off soon. Not anymore: rewards from education take longer.
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