Why wealth and patience appear to go hand in hand | Hacker News Reader

Why wealth and patience appear to go hand in hand

csmonitor.com

70 pointsRickJWagner61 comments

It's looking more like wealth leads to increased patience, not the other way around. Intuitively this makes sense to me, as if you're food-insecure waiting for a better deal that probably won't come is irrational.

https://www.theatlantic.com/family/archive/2018/06/marshmall...

The paper referenced in the article: https://journals.sagepub.com/doi/abs/10.1177/095679761876166...

That was exactly my thought as well. Their causality chain looks completely backwards to me.

Er, the paper cited shows that intelligence (and proxies thereof, like family background, as intelligence/SES are heritable) is prior to the marshmallow test and also predicts patience/success in the marshmallow test. Kids aren't wealthy or not, so that can't possibly be the causal mechanism...

The parents of the kids can be poor though which might lead to a lack of food in the home.

Kids are of course wealthy because they share in the wealth of their family.

The issue is that it's patience at age 4, so kids have had maybe two years to learn even very basic expectation-and-outcome patterns. The effect people often describe where adult poverty teaches you to spend now before you lose your money isn't going to have kicked in yet.

That doesn't rule out food insecurity or other unfulfilled commitments teaching kids this result, but it has to be something earlier and more subtle than the established patterns of wealth in adults.

Kids learn a lot by imitation, and 4 years is plenty long enough for them to pick up on their parents patterns.

Nothing supports your assumption that the effect hasn’t had time to kick in.

"Pick up on their parents' patterns" isn't the same thing, though. At the very least, it's an extra remove away, and probably modified by other control variables in the study like 'parental responsiveness'.

I'm not claiming that family wealth doesn't affect patience, but I see lots of people giving the specific rationale that being poor teaches people to spend their money immediately because it won't be available later. That doesn't make much sense to me, partly because people learn that pattern first-hand in late childhood or later, and more importantly because the original marshmallow test study stayed predictive within an entirely above-middle-class population.

In general, I don't think the current data actually offers much evidence for any specific narrative about how wealth causes this effect. Assessing that would call for information like the effect of relative versus absolute wealth, or at the very least a breakdown of what income levels this correlation happens over.

”people learn that pattern first-hand in late childhood or later”

Is this a fact? If so do you have any evidence or references in support of it?

Family income shows different tends in the marshmallow test. Kids from rich families often do much better. To my knowledge, no one thinks this is because rich kids come from better genetic stock (you'd be amazed how many experiments and studies change when you control for income levels). This supports the gp's hypothesis of the causality stack being flipped upside-down. Having more money leads to less stress, because you have less want. If you're a child of wealth you may not directly have the money, but you sure have the benefits of it.

I'm not surprised if it's true, but is there data showing that kids from rich families do better on the marshmallow test? I can't find it, and I'd be pretty interested to see the size of the effect.

The 2018 replication just added a single control for a whole battery of environmental factors. Family income was included (and correlates like parent's education), but it also lumped in biological factors (e.g. birth weight) and child-psychological factors (e.g. cognitive performance one year earlier). Given that, it's really hard to understand how much impact each specific element had.

Here's a study [0]. From my understanding every behavioral economist would not be surprised by the results. You'll notice the mention of the 2/3 due to "the presence of controls for family background, early cognitive ability, and the home environment." That's family income.

[0] https://journals.sagepub.com/doi/abs/10.1177/095679761876166...

That's the same study I was referring to, though. They didn't provide the impact of any individual control variable, just an aggregate of about eight different factors that are both social and biological. Also, they didn't show that their control corresponds to marshmallow wait time specifically, but instead that it's at least as good a predictor of academic outcomes. (Which means the control and wait time must be broadly correlated, but not necessarily that their 'errors' are aligned.)

What I'm hoping for is something that specifically breaks out the relationship of family income to "marshmallow score", even without a long-term followup. I certainly believe that they correlate, but I'd like to see how strongly, and how it varies across what range of incomes. Even among people who agree that wealth drives marshmallow patience, explanations range from "wealthier families can consistently fulfill long-term commitments" to "food insecurity makes kids take food now". An obvious way to differentiate those theories is to see whether a wealth/time correlation remains strong past the point of food insecurity. (Since the original study was limited to relatively wealthy families, I expect it does.)

I agree that behavioral economists wouldn't be surprised by this result, but I'm not sure they're sold on "it's just wealth", either. While news stories are calling this a failed replication, I'm seeing economists argue that this was a successful replication of the test's predictive power, and only indicts some specific casual theories proposed to explain it. In particular, several of the control variables in the replication are measures of child academic performance, so without an individual-factor breakdown, there's a risk that this is effectively controlling for the variable being tested. I think the "patience makes you successful in life" narratives are laughably wrong, but I wish we had some clearer data on what the actual correlations are.

> To my knowledge, no one thinks this is because rich kids come from better genetic stock (you'd be amazed how many experiments and studies change when you control for income levels).

They do, they're just polite about it because no one wants to put it that way. However, this is just Herrnstein's syllogism in action: if intelligence/education are heritable, education leads to higher incomes, then higher income families will have higher genetic potential which is passed onto kids (especially with the existing high levels of assortative mating on education). And this is precisely what we see with polygenic scores: there certainly are class differences in means.

The Atlantic's account of the marshmallow test is pretty overzealous.

In particular, Calarco describes it as a "failed replication", but in reality the new study (with 10x the participants and more diversity) also found a significant correlation between childhood wait time and teen test performance. I think calling this a failure to replicate is simply wrong.

The new result is that adding two large sets of controls makes the effect disappear. One of those control sets was environmental, including family income - but it also included traits about the individual child up through age three. The other was the child's score on a battery of other psych tests alongside the marshmallow test. Data for individual control variables isn't available, only these two aggregate scores. And the environmental control alone wasn't sufficient to erase the effect; it weakened below significance for some but not all groups studied, but only with both controls did the effect drop to near-zero for all groups. So "wealth causes patience" is one explanation, but "controlled for the variable" is another. And the age-15 test assesses metrics like reading comprehension, math skill, and general knowledge. The age-4 battery included metrics like "memory for sentences", "applied problems", and "complete words". Is it really surprising that controlling for vocabulary at age 4 makes it hard to find differences in vocabulary at age 15?

Even if this isn't controlling for the variable, we might have controlled away the cause instead. Wealth causing lower discounting is one obvious candidate, but we haven't ruled out the possibility that bad circumstances directly lower patience, which then causes bad outcomes. This study controlled for infant temperature, birth weight, and cognitive functioning at age two; if any of those things are a cause of or close correlate with lowered patience, the study loses all of its sensitivity.

And even if that isn't the case, I think the 'wealth causes patience' explanation is just permitted by the data, rather than demonstrated. I'm not sure exactly how you'd test for reverse causation on wealth/patience, but it would probably involve assessing patience at least twice to see whether kids gained/lost it corresponding to wealth. But as far as I can tell, no one has even checked it a second time without controls; wouldn't it be fascinating if age 4 patience correlated with SAT scores better than age 15 patience?

(For the record, I think the real answer is probably that wealth does increase patience in teens/adults, but the early-childhood 'patience' with marshmallows is a secondary symptom of any of numerous factors actually driving these results.)

Source for the best breakdown I've found: https://ifstudies.org/blog/did-the-marshmallow-test-fail-to-...

> Is it really surprising that controlling for vocabulary at age 4 makes it hard to find differences in vocabulary at age 15?

This should be completely astonishing for a certain worldview that a great many people claim to hold.

It's likely a self-reinforcing feedback loop. Knowing that you'll always have life's basic necessities provided for gives your brain time to focus on the long-term and not get distracted by imminent survival needs, which in turn lets you take advantage of opportunities that will only pay off in the long-term. The immediate pathway into the middle class is usually getting a college education; into the upper middle class is getting an advanced professional degree; into the wealthy is founding a successful business or participating in a successful financial or real estate deal. All of these require working hard and delaying gratification for years for a payoff that you can't necessarily see when you start. If your mindset is "Well, I've got a lifetime to spare; what else am I going to do with my time?" that's not a huge loss; if your mindset is "Gotta take what's in front of me now because it won't be there tomorrow" it becomes a lot harder.

I'm only one data point but I disagree. I think their premise makes a lot of sense. You can be patient and still be very poor. I've seen a lot of people be that way. But growing up those people are very likely not to stay that way.

Wealthy parent, I would guess know that patience is a valuable skill and can be taught. Poor parents don't know this. But the poor kids that just so happen to be patient for whatever reason from my experience excelled at socio-economic mobility the way I didn't see less patient people. Every person I know including myself who made it out are very very long term thinkers.

I think it's important to note that the measure of "patience" is this survey question:

"Please consider the following: Would you rather receive 100 Euro today or x Euro in 12 months?"

posed with x varying between 103 and 212. Seems a hell of a lot more meaningful than the "marshmallow experiment" that I was afraid the article would be about but also like it would very obviously skew towards labeling rich people as more patient.

The linked article is pretty devoid of meaningful content but the survey is relatively interesting.

If that's the question, then I'm not surprised when wealthier people score as more patient: They don't need the money now, so might as well wait it out for a higher payout.

What a horrible experiment, too. You could conclude that wealthier people are more able to trust commitment over time. In a $100 context, I would be considered wealthy, but I still might take $100 now just because who knows where this guy will be a year from now. This is measuring time value of money versus risk, imo. Time value of money is also different for someone without money, as well. 100 Euro might buy a quality item now that will last, instead of a cheap version that needs to be replace multiple times in a year.

When I think of patience and building wealth, my first thought is always the college grads who get recruited from university and immediately go out and buy a really nice car. A lot of them even had perfectly functional cars going into their first jobs. In fact, several of them when to work for consulting firms where their nice new cars would be sitting at the airport parking lot 5 days out of every week. Put off that fancy car just a bit and then you can have that little nest egg which will kick off that patience<->wealth feedback loop.

> more able to trust commitment over time

Not only are wealthier people better placed to trust (or risk) commitment, but the world map in the article is hilariously similar to a map of high-trust societies.

If someone in Sweden is more willing to wait for money than someone in Russia, does that mean they're actually higher patience? Intuitively, I think it just means they have a higher expectation of actually getting paid in a year. (And if Nicaragua is bright red, how much of that is that people aren't even sure what address they'll have in a year, so even if they trust you they know they won't get paid?)

Right, that question is pretty much asking you directly if you are poor (or stupid I guess).

Since my savings are well in excess of 100 Euro, and I don't expect them to dip below 100 Euro in the next twelve months, I don't need 100 Euro right now. Therefore my calculation is simple and unemotional: is the interest I'll get from saving what I could receive now higher or lower than the additional amount you're offering me in twelve months if I wait?

For those who aren't lucky enough to not need 100 Euro right now, the calculation is entirely different. Do you want to be hungry, or not?

This makes the question so skewed I don't think it's any valid measure of "patience" at all. I don't need to be patient to wait.

The entire "payday loan" industry depends on this calculation. If you're desperate enough you'll pay almost any future cost for that 100 today.

>is the interest I'll get from saving

That's good, but you also must consider counterparty risk. Will these people offering me x euros in 12 months still realistically be around then ? If the counterparty risk is very low, their offer must be considered at face value. If the risk is higher, the present value of the future x euros must be discounted.

The other point (I assume) the OP is making is that they don’t need the money, at all, so if they can get it then go ahead and take the risk. A poorer person _needs_ that money, so it’s less a patience thing and more a calculated risk tolerance thing. But the wealthy do like having it reinforced that they earned their wealth because they’re better...

Thank you - this is a bizarrely bad question. Not only is "earn interest" a very different use than "eat dinner", but someone short on money is also more likely to have access to short-term, high-yield "investments" like avoiding fees.

Investing 100 Euro for a year might earn 5%, but if 100 Euro today lets me avoid taking a payday loan, I could 'earn' 30%+ in interest not incurred, and should take the money now in more cases. If I'm 100 Euro behind on my gas bill and know the fee for late payment is 80 Euro, I should obviously pass up 150 Euro in a year. If my car I use to get to work is broken, I need 80 Euro to repair it, and I'll make 150 Euro tomorrow by not missing work, then taking the money now is higher payoff (250 Euro total) than any return offered (max 200).

It's a constant frustration I have with econ experiments, even when they're less blatantly silly than this. The Allais paradox (https://en.wikipedia.org/wiki/Allais_paradox) is interesting, but it ultimately shows that people's preferences change when you add an equal amount of expected value to every choice in a wager. When you look at the actual uses of money (e.g. the sub-linear correlation with happiness), it stops being surprising or irrational that people's appetite for risk varies with the dollar value being wagered.

Honestly for $100, I'd be indifferent to receiving it at all.

Agreed. Which means I'd be extremely likely to just take the $100 right now in order to be forever done thinking about the topic.

My economics background hits through. Secure income now compared to insecure income at x might be preferable. Especially if investment opportunities of these 100 curreny units look favourable for the year to come

I think the study mistakes as patience wealth, social trust, and stability. This feels almost as bad as world heatmaps that don't correct for population.

If you've got money to eat, you can afford to wait. If you know people in your area follow through on their contracts, research, etc, you can trust that you'll actually see the money in a year. And if you're confident you'll still have money to eat in six months, you don't need it now for a rainy day fund. (And if you know you'll have the same address in a year, you can expect to get found with the money; Nicaragua isn't crimson just because people are impatient.)

As someone who has been very poor for quite some time, and is now doing quite well, I can tell you first-hand that my patience has improved a lot. The most obvious reason is that I am now at the liberty to not do certain things, not accept certain deals and so on.

I have a theory that one major but hard to quantify benefit of a Universal Basic Income would be that more people would gain the sort of patience you describe.

Based on your own experience, would you think that, say, $1000/month as is being proposed in the States these days would make a difference in that direction?

That's hard to answer, because it depends on the prices in the area where you are. The number needs to be high enough so that if you have paid for rent, food, clothes and so on, you still have a tiny amount left over to save for emergencies. It's the complete lack of any savings that can make you very nervous and impatient.

For example, if my washing machine breaks down, I have the resources to call a mechanic, use a laundromat or even buy a new one. When I was poor, a broken washing machine meant dirty clothes and having to not buy something else until I can afford the mechanic.

You can probably guess that under these circumstances it would be very hard to stay patient with the mechanic if he does a poor job, or if he can't fix it for some reason.

Economics is pseudo-science at best. There are no perfect markets, and thus no ability to test theories. It's no surprise that "studies" continue to prove how much better the wealthy are, or how the middle class worked hard, and people with money deserve it. Economists have to get paid too.

I think the fact that business school exists at all should be our first clue that Economics is mostly pseudo-science. It has little material value aside from propagandizing the ideas of the wealthy.

I disagree. I hold an unusual opinion that all congress members should be required to take an economics class before assuming office because they literally are the ones running our economy. Learning economics helps your thought process in many ways and makes you a better decision maker when it comes to deciding on micro and macroeconomic policies. Weighing benefits, negative externalities, and costs when making investments or policies is exactly what economics trains you best for. Our brains are not designed for decision making involving large numbers of people or large sums of money and by default we fall back on making emotional decisions based on anecdotal experiences. The teaching of Economics helps keep your logic side front and center and allows you to make better, more efficient, and more impactful decisions at lower social and economic costs than would be arrived at by default. Are you able to understand the implications and effects of taxes and government spending when there are 2 trillion dollar deficits instead of 2 billion dollar deficits?

Economics-style thinking is very valuable. If you weren't blessed to have had a great economics professor in your high-school and college years, I recommend reading Freakonomics by Stephen Dubner and Steven Levitt. It was a required reading for my AP economics course and I thoroughly enjoyed reading it cover-to-cover.

Economics is good to learn, just like other theories. My problem is when it's used to "prove" things.

Well, there are many topics that we do science with, and which have multiple variables that we can't always control for, especially if you're doing survey studies for health, or disease or other macro-level stuff. It seems like the extremes of micro and macro of most systems of knowledge are always subject to a large amount of variance. That said a lot of macro-economics is very hard to replicate, making it of dubious value.

This seems to suggest that the correlation means hat patience causes wealth; but why assume the causation isn’t in the other direction?

There certainly is causality here. If you are patient and invest your money long-term instead of spending it all, you will literally be wealthier than if you spent it all.

Of course, there is causality the other way round as well, that is, a basic level of stability and wealth allows you to save.

The more wealth you have, 1) the more likely you have absolutely no desire to spend it all right now and 2), the more likely you're spending money on things that are just as likely to appreciate as depreciate; that can't be called patience.

Spending on disposable goods doesn't scale linearly with wealth. That's why consumption taxes are regressive.

If the 'Stanford marshmallow experiment' [1] is to be believed, patience (well, control of delayed gratification) at age 3-5 is correlated with educational attainment, BMI and even divorce rate in adulthood.

(Note also that subsequent studies [2] found much less significant results than the famous study - and another study [3] found evidence of, as you say, a reversed correlation.)

[1] https://en.wikipedia.org/wiki/Stanford_marshmallow_experimen... [2] https://www.theguardian.com/education/2018/jun/01/famed-impu... [3] https://www.theatlantic.com/family/archive/2018/06/marshmall...

I think the correlation likely works both ways.

Being wealthy makes it more easier to be patient. But also being patient helps generate wealth.

You can't be patient when basic needs aren't being met, and opportunities to meet them are rare and fleeting.

Yep and that problem becomes way more clear when you read the supplemental material that includes the actual question for measuring 'patience' [0 page 12-13]: They were given 5 rounds of the question "Would you take 100 Euro now or X euro in 12 months" Where X starts at 151 and goes through the tree on page 13 to assign you a patience score. The less you were willing to accept to wait 12 months the more patient you are.

This is clearly going to be affected a lot by how much 100 euros is relative to your current living situation.

[0] https://oup.silverchair-cdn.com/oup/backfile/Content_public/...

I live in a poor African country, and even here, people choose to buy things instead of their basic needa being met. Meat instead of beans, alcohol, weed, cigarettes, etc. They rather go hungry and get drunk than have a lot of bland food.

There are some people who might be close to starving, but they’re a small minority.

In the US these people are virtually non-existant. Even homeless people manage to hustle over $100/day. And they don’t spend that money on food, either.

https://www.snopes.com/fact-check/do-panhandlers-make-50-an-...

You don't have to make $50/hr to make $100/day. $10/hr for 10 hours is $100 as well.

panhandlers usually get chased off after afew hours, but go ahead, believe what you will.

I used to run with a sketchy group of homeless people that did heroin together in NYC. Most of them were making over $100 panhandling/hustling/scamming per day. It’s probably lower in other places, though.

Maybe you can't be patient in the weathering a siege sense, but you can absolutely be patient on a shorter time frame. A little short-term patience can get you a long way as opposed to being reckless or hot-headed.

That said, this study seems to be bogus in that obviously people from wealthier countries will view $100 as less significant than countries with poorer economies. That money will go a lot further in such an economy, and is much more valuable there.

Sure you can. Forego the $100, and then sacrifice booze/cigarettes/lotto for a few weeks to make up for it.

Drugs and lotto are not a "basic need" yet a surprisingly high percentage of impoverished people prioritize them over said basic needs. It's a coping mechanism, yes, but 20 days of fasting cigarettes could easily yield the foregone $100

Your narrative is that the poor lack the moral fibre and self-control to quit.

The reality is that they lack the cash to quit. Drink, drugs, and alcohol are used as coping mechanisms to make life bearable. When people move out of poverty - for whatever reason - a substantial proportion suddenly find the self control to change their habits.

https://www.independent.co.uk/news/poorest-families-more-lik...

And your narrative is that the poor lack any sort of free agency.

The reality is that there is some wiggle room for sacrifice and saving that is not unreasonable. My next door neighbors are on Maryland's public assistance for housing program (which places poor families in middle-ish class neighborhoods), so they pay little to no rent. They live off of food stamps. Yet they smoke, drink, use marijuana every weekend, and play lotto (I know because they litter the used tickets on the ground).

Are all of those coping mechanisms necessary to make life bearable? Or just some of them? Is there some room to exercise free agency and periodically forego one or some of them to save a little extra cash so they aren't constantly in crisis? I say yes.

Sample size N = 1 Conclusion: all poor people use cigarettes, lotto and alcohol and I dont like them in my neighbourhood.

How is saving $1000 a year going to help some poor person who lacks education, or opportunities?

I never said all poor people use cigarettes, lotto, alcohol, and weed. But there are tons of studies showing that use of those things is elevated among the poor.

Anyway, the whole point of this thread is that having some buffer money allows you to make more optimal savings choices in the future. It's a cascade effect.

Even $1000 in savings as a buffer would allow you to make better decisions grocery shopping (you can afford to hold off and wait for better deals, etc.) or in the case of this article, have the patience to forego $100 now to get $200 later.

Pretty sure it's the other way around when we want to talk causality here. Wealth allows you to think long term because your short term needs are met and your children are safe.

Patience is measured here by the question "Would you rather receive 100 Euros today or x Euros in 12 months" [0] -- when I was broke, I definitely would've said 100 today at just about any x value. Now, going through the tree I guess my patience has gone up significantly

[0] Link under Table I in https://academic.oup.com/qje/article/133/4/1645/5025666#1368...

I'm definitely surprised not to see Japan amongst the most patient.

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