It is typically argued in the economics literature that the poor operate with a higher rate of time preference than their wealthier counterparts. The poor, it is suggested, have a higher rate of time preference because they are more concerned about present survival than they are about saving for the future. Such thinking is also central to the economic growth for environmental conservation and the poverty induced environmental degradation arguments. According to these assertions, wealth allows people to consider the future and invest in environmental conservation; and poverty leaves people with no alternative but to exploit the environment so that they may feed their families today. Evidence from the food security and famine early warning fields suggests that households in many African contexts behave quite to the contrary. During periods of food shortage, poor households will often undertake extreme measures in the present, including depriving the family of needed calories, in order to preserve productive capital for the future. such as a plough. oxen or seed stock. This evidence suggests that poor African households may, in fact, have very low rates of time preference. This calls into question our general assumptions about discount rates for developing countries, for which rates of time preference are a theoretical determinant. (C) 2001 Elsevier Science B.V. All rights reserved.
