Just a theory. ;)"
This was the answer I provided to the question , "Is time speeding up as we get older or is it me?".
It was the first thing I thought about to answer as it was a question posed as a status message by a friend of mine on Facebook. However, thinking a bit more about it, there might be some legs to it. The main evidence comes from recent work that shows that the human perception of time can be changed by the environmental situations that we find ourselves in , and thus the level of stress that we may be undergoing. Studies have been done that show that when individuals are experiencing exciting actions , like bungie jumping or parachuting, their reported measurement of time extends beyond the actual time, thus their perception of each moment speeds up. This aligns with the statement above, as new or important sensory experiences from moment to moment are spaced out in closer time intervals our perception of what is critical in time is also speeded up and our reported time stretches beyond the actual time. If on the other hand , novel experiences are few and far between, it makes sense that important events stretch out over real time and thus leading to a perceived contraction. (between important events)
The biological mechanism seems to be locked in particular parts of the brain responsible for setting a global timer of sorts, but since these regions are modulated by neurotransmitter activity which can be modified by sensory experience, then the biological timers tick rate (our perception) varies as well.
Some interesting links: