You may have seen some version of the famous marshmallow "delay of gratification" test (if not, watch the adorable quick video clip below). Kids are given one marshmallow, and told that they can eat it immediately. But if they can wait until an adult comes back, they will get a second marshmallow.
The marshmallow test is designed to find out whether kids prefer immediate gratification, or have the self-control to maximize their rewards. The ability to delay gratification at an early age predicts all manner of later success, including greater popularity, lower BMI, and higher grades and SAT scores.
Psychologists have created a similar test for adults that uses money, not marshmallows. You're asked to decide whether you'd like $10 today, or $11 tomorrow. $17 today, or $25 next week. $50 today, or $500 in one year. And so on. The more of a "discount" you're willing to accept in order to get the cash today, the more you prefer immediate gratification.
Research shows that the higher your discount rate, the more likely you are to smoke, gamble, drive drunk, and have unprotected sex -- all examples of putting present pleasure ahead of later consequences. People with higher discount rates also procrastinate more, are less likely to save for retirement, and even less likely to wear a watch -- it's as if they are so focused on the present, time itself doesn't matter.
A new study, to be published in an upcoming issue of Psychological Science, finds that people who have a bigger discount rate -- that is, they are more tempted by immediate gratification -- also have lower credit scores.
I wonder how long it will be before employers, banks, landlord, and other decision-makers catch on and start including a delay-discounting test in the application process. Anything that can stand in for the marshmallow test could be a great tool to evaluate potential employees, loan applicants, renters, even romantic partners -- my guess is those with a higher discount rate are almost certainly more likely to cheat.
If anyone has heard of such a task being used to select among candidates or applicants, I'd love to know about it!
Study referenced: S Meier & C Sprenger. Time discounting predicts creditworthiness. Psychological Science (in press).
