Age and Gender Effects on Time Discounting in a Large Scale Cash Transfer Programme

Abstract

Understanding its determinants can provide vital insight into decisions ranging from savings and financial investment to smoking, obesity and human capital accumulation. This article contributes to a growing literature that seeks to identify the determinants of inter-temporal choice. We explore the role of income shocks, age and gender on time discounting using evaluation data from the Government of Kenya’s largest social protection programme, the Kenya Cash Transfer for Orphans and Vulnerable Children (CT-OVC). Study participants were randomised to treatment and control arms in 2007 and data on time discounting was collected on participants four years after programme inception. Our paper confirms that middle-aged groups are more patient than younger and older adults. In contrast to the empirical evidence, females are less patient than males and this situation is more evident during young and adult life. Males lose their patient during old age. Considering the impact of the programme, the average treatment effect of the programme on time discounting is negligible. However, it varies strongly with age of the recipient, with large and statistically significant effects among prime-age recipients and no effects on younger or older recipients. Moreover, these results are stronger for females than males, an important result given that over 60 per cent of recipients in target households are females