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Time preference

Time preference Definition

Time preference is the economist's assumption that a consumer will place a premium on enjoyment nearer in time over more remote enjoyment. A high time preference means a person wants to spend their money now and not save it, whereas a low time preference means a person might want to save their money as well.

A high time preference indicates that a person puts a high premium on satisfying wants in the near future.

The time preference theory of interest is an attempt to explain interest through the demand for accelerated satisfaction.

This is particularly important in microeconomics. The Austrian School sees time as the root of uncertainty within economics.

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