Time discounting

Updated: Aug 20, 2021

Placing a lower value on receipts or payments due in the future than on equal payments occurring immediately. This may be on account of pure time preference, uncertainty as to whether one will survive to benefit from receipts or make payments, or an expectation that higher incomes will make the marginal utility of money lower in the future than it is at present. See also discounting the future; social time preference.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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