Time Preference: What It Is & How It Affects You

If you continue to eat fast food despite wanting to eat healthily, the reason may be time preference. Learn what it is, how it works, and how to change it.

Understanding 'Time Preference': The Economic Reason You Choose Fast Food Over a Healthy Future

Ask anyone, and they'll say they want to eat healthier, save money, and exercise more. These are such universal goals that they hardly differ across cultures. Yet somehow, we struggle to follow through: we opt for fast food, make impulse purchases, and relax at home watching Netflix or enjoying a few games on sites like Fortunica casino instead of heading to the gym.

If this sounds familiar, don't worry: it's not because you lack willpower or are lazy, but because of something else. Behavioural economics experts call this “time preference,” and this interesting concept explains the reason behind many of our daily habits.

What Is Time Preference?

There are many long and complex academic articles explaining this term, but you don't need to read them. Time preference is divided into two categories: “high” and “low,” and the difference between the two relates to when you receive the reward/payoff. People who want to receive the reward immediately fall into the “high time preference” category, while those who prefer to wait and make the reward more satisfying fall into the “low time preference” category. If we explain it with examples, you will easily understand what each one entails.

Time preference is not a concept about which of these is “good” or “bad.” It simply makes an observation; it does not claim that one is better than the other. However, it seeks to understand the underlying reasons behind both behaviours.

Evolution Is the Key

Those who fall into the high time preference category are actually just following the rules of evolution. Those who fall into the low time preference category, on the other hand, have conditioned their minds to go against the natural rules of evolution. We can explain this simply as follows: throughout human history, food was scarce, survival was uncertain, and no one had any idea what tomorrow would bring. Our brains evolved a simple system to cope with these conditions: immediate rewards for survival.

Because future rewards were highly uncertain, you had to eat right now, take advantage of comfort at the first possible opportunity, and get the reward/pleasure/payoff immediately. Our brains evolved accordingly: evolution taught us not to wait.

So, for example, if you can't resist fast food, it doesn't mean you lack self-control: you're just following your ancestors. Those with low time preference are straining their minds to go against evolution—perhaps what they are doing is healthier and more correct, but that doesn't mean they are challenging thousands of years of habit.

Reward Now vs Reward Later

We can see this even in children. If you tell a child that they can have one piece of candy right now, but if they wait ten minutes, they can have two pieces, they will choose to have one piece of candy right now. A future reward is not real to a child. The reward that is right in front of them and that they can have immediately is real – it is natural for them to choose that. The same is true for adults:

• Fast food is something you can eat right away, while preparing a healthy meal takes time – a future reward.
• A fit body is something you can achieve months later and requires a lot of work, while lying on the couch and watching Netflix is something you can do right now – an instant reward.
• You spend your money immediately because you want to have what you can get in return right away. A savings account, on the other hand, is an investment for a distant future – it is meaningless to your brain.

So, in all these scenarios, your brain simply chooses “comfort now” over “benefit later” because our ancestors have been doing the same thing for thousands of years. We tend to see our future selves as separate from our present selves. Our immediate choices may create problems for our future selves, but they seem like someone else—at least to our brains. Moreover, modern life is full of features that make high time preference the default choice: we have food deliveries, entertainment on demand, online shopping – things that are designed to reward us immediately.

Changing Your Time Preference

If you want to switch to low time preference, it won't be easy: you'll be challenging habits that are the result of thousands of years of evolution. However, you can start with simple things - for example:

• Instead of eating healthy every day, eat healthy once a week. After a month, increase this to twice a week and continue increasing the number of days you eat healthy.
• Automatically transfer 10% of your paycheck to your savings account (before you even get your paycheck).
• When you go to the market, make a list of the things you absolutely need to buy and don't buy anything else.
• Go to the gym once a week and, just like with healthy eating, increase the number of times over time.

In everything you do, try to imagine your future self in detail. Understand that your future self is not a different and independent person. Your goal here is not to give up everything that makes you comfortable. You can still stay home and watch Netflix, but you should also have days when you go to the gym, and over time, the balance should shift in favour of the gym. Changing your evolutionary habits will take time, but remember that your future self will thank you: low time preference can make you a much happier person and renew your life energy.