After a long and tedious work period, nothing like a holiday away from home! I was fortunate to discover a few days ago the doors of the great southern Algeria, in this case the region of Ghardaia for a short stay. Discussions with some of the most eminent representatives of the culture of me M'zab * marked in several ways, but especially a detail of one of those conversations I was particularly struck by an economist.
[ Anyway, although this is a blog, I will not tell you my life reader, I have already done enough in the past by telling my throes of perplexity about the definition of a policy of effective education for my brats or citing my artistic tastes probably questionable in more ways than one ... ]
In trying to explain to the poor western that I am merely the difference between culture and Mozabite way we think about things, our guide, Omar B. (If he reads this blog, it will recognize, but I think it should be as foreign to the culture of blogging is that Rene Girard's work Vuillemin) illustrated it this way (I take back those words probably in a slightly inaccurate and in my own way but as I have not recorded this conversation, reader, you must believe me on speech):
"When a resident M'Zab digs a well, he did not aim to reach the water immediately or even in his lifetime, but only to ease the task of those who will relay then the future generations that they will continue to dig the well and will eventually find water. Then, his descendants will honor his memory. "
He then reported that a few years ago, a fellow French economic advisor to a prominent political figure, he and visiting with me in the same region, had told him that it was precisely the French problem, their inability to neglect the present to project into the future, their "inner mind" (authentic expression!) is not adapted to that.
All this is obviously very poetic, but hopeless insensitive (including poetry and opera) I am, I tried not to get overwhelmed by the beauty of the place by accepting the argument straight out of Omar. I translated his argument in economic terms to mean that some civilizations, especially of Mozabites, have time preferences that differ fundamentally from those of Westerners, especially, a level of patience that is significantly larger than ours, we are obsessed by race for material happiness and recognition easy.
And as I accumulate the defect of being insensitive and to be an inveterate empiricist, I wanted to know if in behavioral literature, there were few tangible elements on this issue. But before you even talk about this a little quick overview on the issue of time preferences in economics.
The issue of impatience is well documented in economics. Economists estimate the rate of impatience through the notion of psychological discount rate or discount rate. The discount rate measures the rate at which an agent crushes deferred income over time. More income is obtained later in the future and more an individual eager to grant him a lower value. This is obviously a central concept in economics, since the psychological discount rate is supposed to base the concept of interest rates (if one was impatient person would borrow in order to consume more today).
For years, economists have assumed that the discount rate was constant: if, for me, now worth 100 euros psychologically the same as 110 euros a year (assuming there are no inflation and no risk in this fictitious economy), then have 100 euros in one year is psychologically the same as having 110 Euros in two years and so on. In this simple example, My discount rate is 10% (or my discount factor of 0.9), it measures the speed at which I depreciate a period t +1 relative to period t, this speed is assumed (in standard economic theory ) does not change for two periods immediately close.
A large body of empirical facts have come to challenge this view of things, most studies (a review of the best known is that of Frederick et al 2002 in the EDL) showing that the discount rate is not a constant. In this case, the discount rate between today and tomorrow is more important to most people that the discount rate between tomorrow and after tomorrow, embodying what is called in the literature of hyperbolic discounting functions. Clearly, I depreciates much more strongly near future as the distant future, which is not consistent with what is usually assumed by economic theory.
How to measure time preferences of people? In fact, without wishing to make a sophisticated methodological debate on it, just ask them how they trade off the sum available immediately and another sum available at a specified future horizon well (method known as "choice Task ").
It is also possible to ask them how much they should be granted to a future period for which they are willing to sacrifice this income. Both approaches are usually used together to "elicit" (measure) the psychological discount rate of individuals (method of 'matching task).
One of the first empirical studies on it was made by Richard Thaler, who will eventually have the Nobel Prize as his contribution to modern knowledge on economic behavior is important. In a study published in 1981, offers participants choose between $ 15 immediately available and $ x available in a month, a sum it available in 1 year and $ z available in 10 years. Participants must indicate the minimum x, y and z they are asking to waive the $ 15 immediately. The median response is $ 20 x = y = z = $ 50 and $ 100. These responses involve a respective annual discount rate for a period of one month to about 350%, 120% for a period of one year and 20% for a period of 10 years. The problem is that this response is not compatible with the representation of the discount rate in standard economic theory, to say that quickly formalized by Samuelson in 1937, annual discount rate is a decreasing function of distance in time, and not a constant.
I will not go further on the implications of this discovery, but it is great for economists. For example, individuals who have hyperbolic time preferences are likely to be inconsistent over time, which means they are not perfectly rational (see my last post about the dynamic choices). Therefore, if I know, as a banker, my client exhibits hyperbolic preferences, I can offer financial products that will first accept and be prepared to pay for it, then, with the passage of time, be prepared to pay to get rid! Consider an example. Suppose that Mr. X is the hyperbolic time preferences, such as a discount rate of 5% between now and tomorrow, and a discount rate of 2% between tomorrow and after tomorrow. If the banker offered him a financial product that earns 3% after tomorrow after tomorrow, he accepts. But tomorrow, demanding a return of 5%, it will be willing to pay to get rid of this product that brings in only 3%. Therefore, I can play against itself perpetually and ruining my profit (the example of the banker is entirely fortuitous, I do not think my bank has heard of this problem of time inconsistency and it is perverse to the point).
Okay, back on topic, or rather to our people M'Zab. Are they really more patient than others ie they adopt discount rates significantly lower than the Westerners in particular the long term?
At this point, reader, I must say that I have not been able to find a published study of Mozabites time preferences, and if someone is willing to finance such a study, I am ready with my proverbial generosity to devote myself to go to the field experiment Gardhaïa to grow and even to Tamanrasset and Djanet. This shows how much I am devoted to my knowledge!
For cons, I found a fairly recent study by Wang, Rieger and Hens here that compares the time preferences in 45 countries. There is not Algeria, and even less Zab region, but there is Nigeria. I'm not sure how close the results achieved in Nigeria and southern Algeria, but I hardly choice.
Some results are summarized in the following graph.
figure: annual discount rate implicit horizon of one year (horizontal axis) / next 10 years (y axis)
A brief comment on this graph. If the shape of the cloud was that of a 45 ° line, individuals are not prone to procrastination, that is to say they would not state preferences hyperbolic. Most people, whatever their country of origin, show a discount rate in the short term, highly higher than their average discount rate of long-term (ten years). Especially, compared to about the ticket, the people of Nigeria, they demonstrate a discount rate of short-term (around 200%) above the median (100%) have a rate of discount long term also higher than the median rate of 19%, about 42% per year. France is apparently not present in the study, but if we take Switzerland and Germany as a proxy, discount rates, whether short or long term, are rather significantly lower than the average, lower than those measured for example in Nigeria. By cons, not enough interesting it does not seem that there is a simple correlation between the level of GDP per capita and the discount rate, which seems intuitive (a higher level of per capita income is linked to lower levels of impatience) but does not appear at all clearly from the graph. You can find all of Thailand and Norway in the lowest rates, and Eastern Europe in the group of highest rates. It therefore appears that there is indeed an influence of the culture of a country on the psychological discount rate. But other factors mentioned by these authors are important, such as level of education increases the level of patience of the people.
Therefore, if the image Mozabite the patient is poetically beautiful, it seems for the moment .... not scientifically based But it is true that I still do not see a means to an experimental study on the psychological discount rate for horizons larger than one generation, so there is still room to innovate in this area.
Therefore, as regards the values of civilization and its conception of Mozabite time, it is possible to think, to quote Peter Parker aka Spider-Man in an old issue of Strange 70s, "is all even allowed to dream, right? ".
*: The Zab is a region of Algeria, located approximately 600 km south of Algiers (see map below).
*: The Zab is a region of Algeria, located approximately 600 km south of Algiers (see map below).
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