Time preference and Willingness to Consume

Time preference is an important part of consumer decision patterns for different degrees of discounting indicates different weights placed on intertemporal values. We try to investigate whether economic confidence measuring expected future income and consumers' current economic assets can affect their willingness to consume and what role time preference plays in the relationships. We surveyed 6,113 adults in the U.S. to collect related variables and fit the data into both linear regression models for estimating continuous changes and a logistic regression model for examining the categorical prediction power given our predictors and adding to the robustness. The results show that there are two channels for time preference to impact willingness to consume: one way is to moderate the relationships with future-oriented economic confidence and current assets; the other way is to directly affect people's purchasing objectives, to make them put more weight on the things that need to buy now. Through these two channels, the increase of time preference is associated with more orientation to the future consumption and the decrease of it relates to the focus on the present, which is demonstrated as showing greater willingness to consume.