Now, easily for many goods and services to help


in order to clarify, I will talk about some important articles about
intertemporal choices in the literature.

of all, Thaler and Shefrin (1981) have showed intertemporal choice as a problem
for self-control. They have introduced self-control into a model of that choice
by modelling man with a planner and with many doers. As a result, conflict
emerged because doers are selfish. So, this conflict was seen similar to the
conflicts of owners and their managers. This paper tries to analyze this agency
model and its applications on the influences on saving, and timing of income
flows and discount rates of individuals.

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the more global economy, the financial managements of people have a variety in
the world and the most common is savings. It is a part of our incomes that we
are not spent. Recently, it is playing a crucial role in the development and
economic growth of countries. Moreover, most of the people living in a
developed and developing countries have difficulty to save. However, people who
lives in developed countries can assess easily for many goods and services to
help them to save their money. In contrast, many households in developing
countries depend on some informal arrangements (Collins et al. 2009; Rutherford
2000). Dupas and Robinson (2013) constructed an experiment in Kenya in order to
understand why poor people have difficulty in saving their money. They had
access to four different savings devices. With these devices, they constructed
them to enable savings for health investments. 
Because citizens of Kenya have generally living with poor health and
shortage of cash that is the biggest obstacle for investments on health. Their
results showed that take-up of 4 saving technologies was so high.  It showed that take-up rates are between 66
and 97%. According to these figures, primary appeal of those devices is the
provide safety and a designated place to save the money of households as their
specific goal.  Secondly, for average
person, earmarking for preventative investments for health was ineffective.
However, earmarking for emergencies on health raised people’ ability to deal
with shocks. Thirdly, to sustain credit to make deposits for health is highly
effective for increasing health investments. Shortly, the authors found that
providing persons with informal savings technologies can increase health
investments and decrease vulnerability to shocks on health.


Thung, Kai, Nie, Chiun and Tsen (2012) analyzed the determinants of saving
behaviour on university students in Malaysia. They have decided to use four
determinants which are  financial
literacy, parent socialization, peer influence and self-control. Their results
investigated that there is a significant evidence between financial literacy
and saving behavior. So, it indicates that the students who have higher
literacy rates are saving more than others. In addition, parental socialization
and saving behavior showed positive relationship. Therefore, parental
socialization leads to increase in savings with guiding and encouraging their
childs. Similarly, the findings shows in the same way- positive relationship
between peer influence and self control with saving behavior.


i mentioned before, assessing the saving accounts improves outcomes that
includes income-generation but also there is evidence for persistent borrowing
at high daily rates for the future expenses (Dupas and Robinson 2013, Karlan,
Ratan and Zinman 2014). In the developing world, savings, consumption and
borrowings sometimes have difficulty in making traditional intertemporal
choices. Karlan, McConnell, Mullainathan, and Zinman (2014) in their paper made
a theoretical model that the limited attention plays an crucial role in saving
behavior. In this study, monthly reminders that sent by 3 different banks in
Bolivia, The Philippines and Peru, tried to help their clients to reach their
saving goals while comparing with a no-reminder group. This sample consists of
people who opened a savings account and made a future plan to save more. In addition, they generated the results under the effects
of two reminder design elements which are timing and content.  The content variations stated implies that
most of the reminders are not effective and the most effective of them is that
remind people of both financial incentives and savings aim. The messages that
leads to change the thebehavior gave effective results to their study.  Also, they found that timing variations do
not have a important effects. But, they understood that getting reminders
raises the saving behavior of people and also amounts of savings as well.  To conclude, they established a model
where limited attention to exceptional expenses can create under saving that in
return mitigated from the reminders. Moreover, they argued that if clients have
behavioral biases under the limited attention takes particular forms, the
attention getting circumstances can create a perverse effects. On the other
side, the interactions of different limited attention types are another line of
inquiry. Their model relied on inattention to future exceptional spending
opportunities while persons attend to income perfectly.  Inattention to income can leads to welfare
losses. And the individuals can cultivate inattention to their incomes to save.


I will talk about the relationship between savings behavior and self-control
mechanisms.  Rha, Montalto and Hanna(2006)
argues in their paper that the personal savings rate in the USA had reduced
from rates which were consistently above %7 in 1960s,1970s, 1980s to low rates
in 1990s, it is a negative rate in 2005.  The purpose of their paper is to show
differences of savers and non-savers profiles and saving behaviors under the
effects of self-control mechanisms which include saving goals and its rules,
expcectations of future expenses proposed by behavioral life circle. As a
result, they investigated that saving behaviours and self control of households
have a positive relationship. In addition, households who have saving goals
like retirement tend to save more than others. But, having future expenses
shows a small effect on savings. Moreover, the multivariate results
investegated that age has a negative and nonlinear impact on saving behavior. For
example, individuals who are between 45 and 54 old makes less saving than
individuals who are under age 35. Also, longer planing horizons and taking
risks had a nonnegative impact on saving behavior.


talking about savings, I will turn to mention about sample articles about time
and risk preferences. While searching on the internet, I noticed that recent
economic literature on intertemporal choice mainly focused on the assumption of
exponential time discounting.

Khwaja, Silverman, and Sloan(2007) examined the relationship between time
discounting, time preferences and smoking choices.  Also, they examined the other determinants of
the time preferences and smoking.  They used
general measures of time preferences and then they showed that smokers are
impatient. But, none of them are correlated with time discounting. So, their
results showed that time discount rates through choice scenarios are not
related with smoking behavior. But, the measures of time preferences and
self-control like financial planning are much related to smoking decision of
people.   The decision of smoking shows
an intertemporal tradeoff with implications for persons and welfare. Eliciting rate
of time discount from choices on financial and health domains, they examined
the other determinants of preferences of time and smoking levels relationships.
Also, they realized that other determinants of self-control can differ by
smoking. Shortly, while measures of time discounting were seen in the
literature, they found that there is no relationship between these measures and
smoking. This means that the variation of time discounting is not an important
force behind behavioral differences of smoking.  However, they found that the determinants of
impulsivity and the lenght of financial planning show a relationship with
smoking behavior. More impulsive ones are more likely to have smoked and tended
to continue to smoke. Furthermore, smokers have intensivity to have short
financial plannings.


            Finally, a question arises
in development economics is to understand the link between economic success and
basic features of preferences of humans. When human-beings are averse to financial
risk, they can be so reluctant to generate a business that can have risky to
cash flows. When human-beings are impatient, they can tend to invest and/or
educate their childs.  If we mention them
together, impatience and risk aversion can give some answers to the question of
why some people remain poor. Tanaka, Camerer and Nguyen tried to anayze this
situtation in their paper.


Tanaka, Camerer, and Nguyen (2010) conducted an
experiment in Vietnam in order to show how income and demographic variables are
correlated with time and risk preferences. Their results showed that mean income
of the village have a relation with risk and time preferences. Households who
lives in poor villages are not afraid of the uncertainity to income; instead of
that, they are averse to loss in income. They investigated that risk aversion
for instrumental variable for income is significanlty realted with mean village
income. Also, mean village income is correlated with lower discount rates from
the experiment pf time discount. Thus, rich villages are not only risk averse
but they are more patient. In order to clearly understand, their results show
that people are biased regardless of their income levels and their economic
environments. As a result, a contribution to their study is to investigate how
to extent the measurement of risk and time preferences beyond the exponential
discounting and expected utility, while replacing prospect theory.