Thursday, May 21, 2009

Kid Discount Rates

This article describes some interesting psychology research into the relationship between childrens ability to delay gratification and long-term outcomes. They don't use the term, but this is essentially a discussion of the fact that we can, to a certain extent, identify people with low discount rates at a young age (and thus there may be some genetic origin):

In the late nineteen-sixties, Carolyn Weisz, a four-year-old with long brown hair, was invited into a “game room” at the Bing Nursery School, on the campus of Stanford University. The room was little more than a large closet, containing a desk and a chair. Carolyn was asked to sit down in the chair and pick a treat from a tray of marshmallows, cookies, and pretzel sticks. Carolyn chose the marshmallow. Although she’s now forty-four, Carolyn still has a weakness for those air-puffed balls of corn syrup and gelatine. “I know I shouldn’t like them,” she says. “But they’re just so delicious!” A researcher then made Carolyn an offer: she could either eat one marshmallow right away or, if she was willing to wait while he stepped out for a few minutes, she could have two marshmallows when he returned. He said that if she rang a bell on the desk while he was away he would come running back, and she could eat one marshmallow but would forfeit the second. Then he left the room.


Once Mischel began analyzing the results, he noticed that low delayers, the children who rang the bell quickly, seemed more likely to have behavioral problems, both in school and at home. They got lower S.A.T. scores. They struggled in stressful situations, often had trouble paying attention, and found it difficult to maintain friendships. The child who could wait fifteen minutes had an S.A.T. score that was, on average, two hundred and ten points higher than that of the kid who could wait only thirty seconds.
If you read the whole article, you'll find some allusions to something which I think relates to the discussion from yesterday's class about the importance of exogenous factors versus individual traits -- the difficulty identifying and measuring a clear personality.

Humans like to ascribe people's behavior to the person, e.g., Dave blew past me and almost knocked me over, therefore Dave is a jerk. If we observe a person enough, we start to believe that we can discern a personality. Psychologists, though, have had difficulty identifying and measuring personality. They've made some basic steps, but people are a bit erratic. Put the same person in the same situation repeatedly, and they will behave relatively similarly. However, modify the situation slightly, and they will behave very differently. As such, some psychologists believe that the situation determines individual behavior least as much (if not more) than the person does.

For economists, this is a very natural way to think about stuff. The social psychologists are merely confirming what economists strongly believe -- people respond to incentives. However, since people -- particularly children -- have limited control over the situations they face, this further my personal belief that exogenous factors are very important in determining individual outcomes.

If you want to learn more about the importance of situations for determining behavior, I highly recommend the book "The Person or the Situation".

I'm not sure if I would be a low-delayer or a high-delayer. Of course I'd like to think of myself as a high-delayer, but based on Mischel's findings about how those kids behaved years later, I have to think I would have been a medium-delayer, thinking of what the benefit would be down the road to avoid eating the sweets right away, but probably around that 3 minute mark I would give in. And yes, I would like a video tape of my transaction.
The correlation they've found between a child's discount rate and his eventual SAT score is interesting, but to me personality is almost impossible to measure. I believe that personality can be easily changed over time due to a wide variety of factors. After moving from Southern California at age 15, I lost touch with some of my old friends that I had grown up with. Years later as I've reconnected with some of them and ran into other acquaintances from my youth, I noticed that many of them turned out far different than I would have guessed. To me, it is far more interesting to try and piece together why certain people change so much. I've found that if you spend enough time around people and ask the right type of questions, you can get a pretty good feel for what has caused them to change. I am a firm believer that a person's experiences shape their personality, and that two people with similar personalities as children often turn out very different as they grow older. Some psychologists believe that personality is nearly impossible to change, but I couldn’t disagree more. It’s all about what you do, who you hang out with, where you live, how others treat you, and a ton of other factors.
I know from my up bringing and child hood, that I would probably be considerded a high-delayer. As of today I have alot of patience because of the patience i had growing up. But I would say that the correlation of high-delayers and high SAT scores and such, do not apply to me. Even though one may have lots of patience it does not mean they will be great achievers.
While I agree with Mark that personality is something that is difficult to measure over time, I think that at least the general type of personality a person is innately bestowed with is something that can be measured early in a person's life. Before the impacts from parents, schooling, and all other exogenous factors have a chance to take significant effect, there must be a starting line that each individual starts at, and perhaps even a normal curve that can describe where the majority of people with that type of personality might fall in terms of future success in life. I do believe that there are certain types of personalities that are better suited for success, and I also believe that the personality that a person possesses right out of infancy is exogenous. At the same time, I believe in the possibility of change and that everyone is capable of it, regardless of where he/she may have started out. Ultimately, I guess I'm trying to say that it isn't an individual's personality that is impossible to measure, but rather a person's capability and/or drive to change.
This article was interesting in the way in which it presented the correlation between later SAT scores and a child personality and will to be patient. But this article seems to incomplete not really hitting on the child’s upbringing and where the child is from, whether the child was a minority or not, or even the level of income that the child had. I believe that there are most definitely a mix of children that come from both poor and well off families which showed to have both patience and a need for instant satisfaction, but I believe that the child’s upbringing and the way in which he/she was actually raised would have a great part in this test, more so than the child’s level of intelligence. There are many people that I know directly which are very inpatient and are very quick to want and desire instant satisfaction, but are extremely intelligent, but those could simply be outliers. Personality is something that is very difficult to measure.
This is an interesting article but I am not convinced that patience affects SAT scores at least not in such broad terms. I think there were a lot of omitted variables in the study. The argument is debatable especially since the low-delayers could all be from similar families, or schools etc. Not to mention I struggle with patience and I did great on the SATs. And I feel like I know several impatient people who are very smart and test well and who would probably not want to wait 5 minutes let alone 15 for a second mello.
I always heard about the marshmallow story about how the patient would reflect to the SAT scores. I think their relationship is ambiguous, because exception might occur and affect the result such as the family influence, personality and other factors. However, this is an interesting article that is debatable.
I think that each individual can delay to an extent on what they are delaying themselves for. I would consider myself a low delay person but I did fairly well on my SAT scores. I don't think I would have to agree with the study there are a lot of different types of individuals and personalities and don't think that patience affects their personality.
I think that there are many experiences that can shape how patient a person is and I dont think it would be fair to label someone as a low-delayer or high-delayer at such a young age, I know plenty of people who were very impatient and hyper as younger children and now have grown into very patient and intelligent human beings.
There are studies where they follow the low-discount rate and high-discount rate kids when they grow up. It less likely for the kids who can wait to be criminals, have a higher SAT scores, better grades, and better job. It is more likely for the kids who can't wait to be criminals, lower SAT scores, lower grades, and lower income.
This experiment is really interesting. I am curious on how they even came up with this experiment. It is interesting to see that a child who can be patient to wait for an extra portion of food can correlate to how well they do on their SAT score. This theory definitely works on me. I am an incredibly impatient person, which is probably why I did not receive the score I would like to have scored.
So basically I need to teach my kids to be patient or have higher discount rates to receive a higher SAT score........I'm not buying it. I disagree only because, between the ages of 4 and the time you take SAT's children develop so many differnt personality traits. There are several factors why the child had a low discount rate, maybe he missed breakfast or his mother never buys him marshmellows. I think we need to look more at parenting styles, because kids are so vunerable and learn from their parents.
I will consider myself as a high delay person. However, I am not good at testing. Even though I am a high delayer, I can study for a long time but I will forget easily. I don;t agree with the article since I believe that personality will change over time and may not show up in scores.
Through repitition and practice, human behavior can be altered and conditioned. I agree with the article in that these behaviors carry over from school into other facets of life. I also agree that traits such as discipline, can be taught. I do however disagree with the subjective nature of the test. In finance, one might argue that money or in this case candy, is always more valuable now then later. Factor in the law of diminishing marginal value and potentially the impatient kids are actually the smartest of all. Also, I would have liked to seen consideration for kids that might be high delayers for one item but low delayers for others. I would best describe myself as somewhere in the middle.
Both the situation and personality effect outcome. Like all things in life there's not just one explaining factor but interrelated factors that influence behavior. It's complicated otherwise we would have it all figured out. I do believe a child who is able to figure out that waiting will bring the best outcome usually would do better on SAT because obviously it shows an ability to problem solve. Or the child has a patience quality that reflects an ability to act calmly through obstacles thus has less behavior problems. Is there a correlation between test scores and detentions? I would think that someone who is prone to detentions wouldn't perform well on SAT but does that mean SAT scores reflect IQ? Maybye that child would act differently to another treat or toy or benefit. One could probably go on and on, I just pointed out the obvious questions.
While this is very interesting and there very well could be a correlation between the actions of a four year old and S.A.T scores almost thirteen years later, i find it hard to believe that a person can be categorized that early. Even after reading Outliers and freakonomics, and seeing that some of who we are is determined far before we could ever realize, it does not take into account the growth that can happen in those years, personally i probably would have taken the treat as soon as the person left the room but as iv grown, learned from the mistakes of hasty decisions, and have learned how to weigh my options. it is a skill that, under the right guidance can be acquired.
I don't believe the relationship between mashmallow and S.A.T score is clearly useful. Just because some kids can't wait long enough like other, doesn't mean they are stupier than others. It can only prove that they don't have as patience as others. Also, I do believe humans grow through time. The result will be difference if you test the kids when they are in college. Further more, I think the result will become a bid difference by using IQ test than S.A.T test.
This test reminded me of those psych tests that we are always told about in psych 201. I think I am a low delayer, I'm patient but I enjoy a instant satisfaction after the work done. Now when I look at this test I would have to say no matter what I would have taken the marshmallow. At the age of 4 I can hardly interpret the world let alone trading satisfaction now for later. I also seem to remember from those psych classes that children cognitive and reasoning abilities only develop so far by the age of 4 and how able are 4 year olds in general to reason these types of situations.
This article/discussion sheds light on the idea that economic models cannot truly describe reality. At least up to this point in my undergrad studies, most models tend to be binary. I.e., someone is a "high-type" or "high MPC". This method of characterizing human tendencies or abilities is fundamentally flawed because it assumes constantly rational behavior and consistency. Obviously, human behavior is much more complicated, inconsistent, and occasionally irrational. Economists may call this "erratic", but I call it natural.
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