Time and money are arguably two daily resources that significantly influence experiences, planning, design, and well-being, among others. For the few decades after the seminal work of Kahneman & Tversky (1979), most studies in behavioral economics have been on the prospects of money. There has hardly been a handful that has examined how people value time under uncertainty, although it is common for us to do so in daily life. Infact, a large part of our daily activities involves judging the psychological value of time. This study aimed to fill that gap in our understanding by measuring whether people are loss-averse to time in the context of daily commutes based on suggestions by navigation apps.
Theoretically, based on the magnitude-dependent loss aversion hypothesis by Mukherjee et al. (2017), Sumitava Mukherjee from IIT Delhi and Narayanan Srinivasan from IIT Kanpur tested a less explored aspect about whether people are loss averse to time – i.e. do losses of time loom larger than corresponding gains using comparative hedonic judgments? They manipulated the time at stake to understand how different magnitudes of time influence decisions for typical daily commutes and feedback from navigation apps.
Using comparative hedonic judgments, the impact of prospective gains versus losses of time was examined for common contexts like waiting and local travel based on suggestions by typical navigation apps. In one situation, the participants were asked how intensely they would the participants feel when they experienced a situation where they could gain time compared to a situation where they could lose time. The scenario was about two queues (as in airports showing displays of expected wait time), but there was no certainty about which queue would move faster. Thus, 50% chance existed for both queues to move faster than the other because of multiple uncertainties at the counter. Some queues take less time while there are times when we are stuck for a long time. The questions were like this:
For x minutes of time, what would have more effect on your emotions? Gain of x minutes OR loss of x minutes.
The magnitude of time was manipulated at seven levels (x = 2, 10, 30, 50, 90, 120, 150 min) within subjects randomly.
In another experiment, participants were provided a context of local travel time as commonly shown in navigation apps:
Imagine that you need to travel to work every day, which on average takes 45 min but can range from 30 to 60 min. You plan generally so that you have a reasonable margin of time handy to ensure that there are no overt consequences at work. On some days, you reach earlier and hence gain some time if it takes less than 45 min while on some other days; you reach later and hence lose some time if it takes longer than 45 min. You travel alone and generally find the traveling experience as just fine. For the scenarios mentioned, what would have more effect on your feelings/emotions?
Each question posed a different magnitude as follows: A gain or loss of 2 min (reach in 43 min vs 47 min), 5 min (reach in 40 min vs 45 min), 10 min (reach in 35 min vs 55 min), and 15 min (reach in 30 min vs 60 min). The order of questions was randomized across participants and the order of presenting the gain or loss option was also randomized for each question.
Prospective gains loomed as larger or equal to losses for low magnitudes, while there was a trend of losses to loom larger than gains only for high magnitudes of time. These results challenge the general apparent tautology that losses always loom larger than gains. Supporting prior work on money, these results highlight the magnitude-dependent nature of valuation, thus presenting a nuanced perspective on the affective psychology of time.
While we need to work on urban mobility to reduce time and especially waiting, it is also important to note that people are not craving that one-minute or even five-minute faster ride. So, take it easy – for businesses and transport / urban commute departments.
Cited work:
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291.
Mukherjee, S., Sahay, A., Pammi, V. C., & Srinivasan, N. (2017). Is loss aversion magnitude-dependent? Measuring prospective affective judgments regarding gains and losses. Judgment and Decision Making, 12(1), 81–89.
Mukherjee, S., & Srinivasan, N. (2021). Hedonic impacts of gains versus losses of time: are we loss averse?. Cognition and Emotion, 35(5), 1049-1055.
