Money and TimeBY ABBEY AINSLIE, ALEX EGGINGTON AND HARRIET STATTER.

Overview of the presentation• Background of the two papers• Paper 1: 3 studies:• Experiment overview (hypotheses, method)• Results• Critique: strengths and limitations• Implications• Paper 2: 3 studies:• Experiment overview (hypotheses, method)• Results• Critique: strengths and limitations• General/overall critique• Conclusion/Future references

Introduction/BackgroundResearch shows decisions about time are often made differently than decisions about money•Time activates a more emotional mindset•Money activates a more economic value mindset

How organisations pay their employees may influence the psychological evaluation of time and the how people make the tradeoff between time and money.

The first paper investigated whether hourly payment/making hourly wage salient would cause an economic evaluation of time

The second paper examined how the mindsets associated with the concepts of time and money can affect the happiness we derive from an activity differently: the influence of impatience

When time is money: The effect of hourly payment on the evaluation of time (DeVoe & Pfeffer, 2007):

Study 1….Hypothesis = employees paid by the hour will be more likely to endorse the same statements of mental accounting for time as for money than employees not paid by the hourMethod Participants: 86% of the 88 people approached to participate in the anonymous questionnaire agreed to fill in the survey1.Participants indicated whether they were paid by the hour or not2.Participants rated their validation of the eight statements on mental accounting generated by Solman (2001)3.Each of the eight statements were looked at individually and the average endorsement of workers for each of the statements was calculated Results•Hourly paid participants were more likely to endorse the mental accounting model for time than non-hourly paid participants.•Found that the average endorsement of hourly workers for each ‘time’ statement was higher than the average endorsement of workers not paid by the hour•In contrast, in only two of the eight statements the average endorsement of hourly workers for each ‘money’ item was higher than the average endorsement of workers not paid by the hour

Conclusion:

•Differences between employees paid by the hour and employees not paid by the hour are related to how each group thinks about time, not money.

•Individuals paid by the hour were found to be more likely to endorse a mental accounting model for time than individuals not paid by the hour

•Soman’s (2001) finding that workers will tend to assess the mental accounting model firstly for money as opposed to time was only found in individuals not paid by the hour

even when controlling for the participants weekly income and the number of hours they spent working

Study 1….

CritiqueLimitations•Data collection environment- rushed, time constraints•Lack of demographic information gained•Absence of controls for which hourly and non-hourly workers differ in other ways•Sample size •Sample not evenly split between paid by time (11) vs not paid by time (54)•Participants in the sample used mental accounting model for time more than the original (Soman, 2001) sample that the statements used were created on – biased data collection environment?•Possible that people who account for their time like money CHOOSE to work in hourly paid jobs

Study 2…Hypothesis = individuals paid by the hour would be more likely to trade more time for money than individuals not paid by the hour

Method •May (2001) Current population Survey work schedule supplement - Participants asked whether or not they would choose to trade more of their time for money•Several control variables were measured including: characteristics of the job, weekly earnings, number of hours worked. Additionally age, gender, marital status, children and total household income.Results•32.1% of hourly workers expressed a willingness to trade more time for more money, however only 17.1% of non-hourly workers expressed this. – consistent with the hypothesis. •Regression analysis was used to highlight other potential variables that may explain the differences associated by payment systems.

Individuals paid by the hour weighted economic returns more strongly in making trade offs between time and money

CritiqueStrengths•Controlled for other variables which might have affected participant’s willingness to trade more time for money; including earning, marital status•Identified influencing variables: current earnings and numbers of hours spent on work

Limitations•Current job was used instead of a measure of total exposure to hourly payment in working life – experience may affect the extent of economic evaluation of time•Control variables – could have included job satisfaction / enthusiasm to work•Response from non-hourly workers could be counterfactual, as they aren’t able to trade more money for time, whereas responses are more realistic from hourly workers•One item for willingness to work more•Similar to study 1: people willing to trade more time for money CHOOSE to have an hourly wage job

Study 3…Hypothesis = individuals whom have no prior exposure to hourly payment methods who are then made to be aware of their hourly wage may begin to express the same willingness to trade more time for more money

Method •62 participants recruited from nation-wide data base (39 women, ages 19-67, 58.1% college educated)•Completed online questionnaire in exchange for a gift certificate to an online retailer•Conditions:-Control condition-Calculate hourly condition

Results•individuals with little or no previous exposure to hourly payment systems who were made to calculate their hourly wage rate showed an increased willingness to trade more time for more money•Individuals with a lot of previous exposure to hourly payment systems showed no difference in willingness to trade more time for more money in the control and calculate hourly conditions.

CritiqueStrengths•Prior exposure to hourly payment was assessed by asking to rate amount of experience – no assumptions

Limitations•Online questionnaire may cause problems – unsure environment, not paying full attention, completing as quick as possible/ not properly•Participants in control condition were asked initial questions related to earnings – salient•Paid – elicit monetary aspect – bias to be willing to work

Critique Questions• Is the study question relevant? Yes highly relevant, and applicable to organzational culture payment systems effect the employees and how

they will work And based on previous research • Does the study add anything new? The study replicates previous research in this area for example Evans et al. (2004) - discussed later It introduces a new scope concerning the willingness to work, and exposure to hourly payment • What type of research question is being asked? Between subject Self-report

Critique questions• Was the study design appropriate for the research question?Yes, it ensured that only the relevant variables were being testedHowever a potential improvement could be that future research would consider effects of the additional variable

of demographics which were not controlled for in all of the studies

• Did the study methods address the most important potential sources of bias? To some extent. There is a mixture of strengths and weaknesses concerning potential bias in the study. Most of

the first studies did not address potential bias for example paper 1 study 1 did not highlight demographic information that may have influenced the results.

However study 2 Controlled for other variables which might have affected participant’s willingness to trade more time for money; including earning, marital status

• Was the study performed according to the original protocol? It appears so but we cannot say for sure

Critique questions• Does the study test a stated hypothesis? Yes, each study highlights clearly the hypothesis to be tested • Were the statistical analyses performed correctly? Yes, as far we known • Do the data justify the conclusions? Yes the data do justify the conclusions to some extent. However because these are correlation studies

cause and effect cannot be proven. • Are there any conflicts of interest? Not that we can think of

Implications?Other papers to support/oppose findings?

Supporting Literature:

•Merriman (2014) found that when pay is determined by the amount of time worked, individuals will be more likely to choose to do more work in order to avoid the now prominent feeling of opportunity cost of leisure time.•Evans et al (2004) reports that in a study of independent contractors who’s services were sold by the hour – despite the workers being free to set their own limits on number of hours worked, the contractors avoided time off work due to the salient nature of the economic losses of their leisure time•DeVoe et al (2009) found a relationship between being paid by the hour and desire to exchange time off of work for more money. Additionally that after changing jobs in which payment systems also changed from hourly to salaried, the individual employees preferences in trade off remain at least in the short term. However it was found that these preferences may decay over time.•Pfeffer et al (2009) argues that economic evaluation is one important predictor of attitudes in time usage.

Implications?Other papers to support/oppose findings?

Future Research:

natural experiments

Other organizational practices associated with influencing how individuals view time

self-fulfilling effects

Real World Implications:

The nature in which we evaluate time, has a great impact on ourselves, organizations and society. More information is necessary to understand the influence of organizational practices in decision making concerning time.

Time, money and happiness: How does putting a price on time affect our ability to smell the roses? (DeVoe & House, 2012):

Study 1…Hypothesis = Participants prompted to think about time’s economic value would derive less happiness from an unpaid internet break.Prediction = Participants induced to consider their hourly wage derive less happiness from an unexpected

break.Method Participants = 53 undergraduates paid $5 a session and randomly assigned to 2 groups:

• Time/money condition• Separate income/hours – Control10 minute leisure time: internet time

Results•In the time/money condition there was found to be no significant difference exhibited pre- and post- leisure time (0.25). •Whereas in the separate income/hours condition there was a significant increase in happiness post-leisure time (0.02)

CritiqueLimitations•No experimental control over the type of entertainment chosen by each participant (Mitchell, Lebow & Uribe, 2011)•Rather small sample size•Participating in the study has a monetary value•Current students jobs and past work experience•Both groups answered questions about work and expected earnings•Happiness is relative (Yoon, 2013)

Better alternative: Happiness evaluation (Kolmijn & Arends, 2011)

Study 2…Hypothesis = Impatience is induced when calculating the economic value of time due to the fear it is being

wasted.Prediction = This induced impatience mediates the casual relationship between thinking about the

economic value of time and the failure to derive happiness from pleasant experiences. MethodParticipants = 368 usable individuals recruited from Mturk and randomly split into 3 groups

• Time/money condition• Separate income/hours condition• No work/money mention – Pure controlPleasant stimulus = listened to music (86s)

Results •The time/money condition was significantly less happy after listening to the music than both the separate income/hours control and the no work/money mention condition (0.03)•The separate income/hours condition and the no work/money condition reported significantly lower feelings of impatience whilst listening to the music than the time/hours condition (0.004)

CritiqueStrengths•Used music as there is much evidence to show it boosts state of happiness (Suda et al. 2008, Juslin et al. 2008): improvement on internet leisure time•Large sample size than study 1•Much larger range of happiness scale compared to study 1•Overall, study 2 replicated and extended the findings of study 1

Limitations•Possible effect of just performing calculations could place participants in an analytic (not emotional) mindset•The difference in scales may mean difficulty comparing with study 1•People’s opinions and experiences of classical music varies (Robazza, Macaluso & Durso, 1994)

Use previous research to identify the happiest music (Hunter, Schellenberg & Schimmack, 2010)•Conflicting happiness variables are not accounted for

Study 3…Hypothesis = Being compensated for listening to music boosts participants enjoyment of it but would have no effect on those asked to complete the same computations using meaningless numbers.Prediction = When people who are considering their time in terms of money receive compensation for their time, the feeling of wasted time should abate.MethodParticipants = 145 viable Mturk recruits paid $1 and randomly assigned to four conditions:

• Time/money + Compensation condition• Time/money + No Compensation condition• Meaningless calculations + Compensation condition• Meaningless calculations + No Compensation condition

Results•Those who were compensated for the time they spent listening to music derived greater enjoyment from it (0.04)•The main effect for this was driven by the time/money compensation condition (0.004)•For those who were not compensated, the time/money condition resulted in marginally less music enjoyment (0.09)•Those who were compensated also reported feeling less impatient than the uncompensated conditions ( 0.026)

CritiqueStrengths•Eliminated possible effects that results would just be due to analytic mindset = good control of the confounding variable

Limitations•Different music tastes affecting enjoyment•Statistical significance of p=.09 for the replication of studies 1 and 2: that the time/money condition resulted in less enjoyment (with no compensation) than the meaningless calculation condition•Actually predominantly measured musical enjoyment rather than happiness categorically

General/Overall Critique3 beliefs interacting with results:•Recallability •Optimism •Conservatism

Judgement biases•Hindsight

Critique QuestionsYoung & Solomon (2009):1.The study question is relevant to the field.2. This paper extends on the findings of the 2007 paper by being generally less specific about the type of worker involved and by expanding on the happiness implications.3. It is a between subject design, experimental study.4. The study design would be more appropriate for the research question had experiment 1 also used Mturk participants5. For the most part the study methods addressed the most important potential sources of bias but they could be more standardized.6. The protocol differed greatly between the three experiments which was unnecessary 7. The study tests the hypothesis both directly and indirectly in the three experiments8. The statistical analysis were performed correctly although in one case included when it was not actually relevant to do so.9. The data justifies the conclusions as previously outlined.10. It is hard to conclude whether there are any conflicts of interest with any finality, but to our knowledge there are none

Conclusion• There are influences on the psychological evaluation of time• Making monetary aspects of time salient can make people attend more to the economic evaluation of

time• Thinking about time in terms of money can affect happiness• Studies have shown the number of leisure hours in last 50 years has increased (Aguilar & Hurst, 2007)• But no increase in happiness (Layard, 2005)

Future research:Greater attention to the psychological consequences of practices that remind people of the economic value

of their time

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