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Time is a fascinating variable. It’s personal use is often regarded as highly valuable by its ‘owner’, yet strangely regarded as unimportant by many others. Jamaicans, for example, see few problems in being late or not making appointments, which is both disrespectful and costly. They are often shocked when people arrange things and stick to the stated times. Nothing funnier than meeting people on your way out of somewhere, as they traipse in 15, 30, 60 minutes late, and you are headed to your next appointment 🙂

Time is a continuum that is often fraught with conflict over its use. Its use comes at a price, often implicit (when it’s lost the costs often become explicit), sometime explicit (lawyers and consultants have billable hours).

People hold contradictory views about time, simultaneously: ‘I love to just sit and do nothing’ can be uttered by the same person who says ‘How can you spend 3 hours playing golf?’screen-shot-2017-03-02-at-7-07-00-am

Economists have a lot of fun with time: it’s often a key variable in understanding many phenomena because they really only make sense when seen over an historical period, either looking backwards or trying to look forward. Economists don’t often put too much store in things that are evident now, or at a single point in time.

In economics, time preference (or time discounting) is the relative valuation placed on a good or service at an earlier date compared with its valuation at a later date. Someone with a high time preference is focused substantially on his well-being in the present and the immediate future relative to the average person, while someone with low time preference places more emphasis than average on their well-being in the further future.

Time preferences are captured mathematically in the discount function. The higher the time preference, the higher the discount placed on returns receivable or costs payable in the future.

People often confuse themselves about time, which is a construct in the way we measure it, but is an absolute (assuming we cannot do inter-temporal travel). The same amount of time is always available, but what matters is how people decide to prioritize actions in blocks of time. Having more time for x, usually means less time for y: even with so-called multi-tasking, one is giving less time to something than could be the case if it were being done alone.