Would you like one Gummi Bear today or five tomorrow? When I asked that question to my sixth hour class, those responding said that they preferred to have one today. Many educators site this as an example of how much young people discount the future. In this case, the present value of five Gummi Bears was one. That discounts the future 500%?
Although I don't believe students discount all future events five times, I believe that they will trade tomorrow for today. that means students won't study when they can watch television. They will spend money on a credit card at a high interest rate. Gary Becker believes that criminals will heavily discount the future when the benefits arrive today but the costs are uncertain in the future.
Ruby Payne has written much about poverty. As I remember it, her research shows that children from poverty are always concerned that an unseen catastrophy will steal their wealth. If that is true, then they would have a huge incentive to consume now when the benefits are certain.
In the Iowa Core Curriculum, we are supposed to teach savings and investing for college education. There is no doubt in my mind that education increases earnings. But how will children from poverty change their attitude toward savings when their wealth can be stolen from them?