Content area

Abstract

We investigate the predictive power of survey-elicited time preferences. The discount factor elicited from choice experiments using real payments predicts various health, energy, and financial outcomes, including overall self-reported health, smoking, installing energy-efficient lighting, and credit card balance. Allowing for time-inconsistent preferences, both the long-run and present-bias discount factors (δ and β) are also significantly associated in the expected direction with several outcomes. We consider several hypotheses regarding the strength of the association between discount factors and outcomes, such as salience of the outcome or liquidity constraints.

Details

Title
Time preferences and consumer behavior
Author
Bradford, David 1 ; Courtemanche, Charles 2 ; Heutel, Garth 3 ; McAlvanah, Patrick 4 ; Ruhm, Christopher 5 

1  University of Georgia, Athens, GA, USA 
2  Georgia State University, Atlanta, GA, USA; NBER (National Bureau of Economic Research), Cambridge, MA, USA 
3  Georgia State University, Atlanta, GA, USA; NBER (National Bureau of Economic Research), Cambridge, MA, USA; Department of Economics, Georgia State University, Atlanta, GA, USA 
4  Federal Trade Commission, Washington, DC, USA 
5  NBER (National Bureau of Economic Research), Cambridge, MA, USA; University of Virginia, Charlottesville, VA, USA 
Pages
119-145
Publication year
2017
Publication date
Dec 2017
Publisher
Springer Nature B.V.
ISSN
08955646
e-ISSN
15730476
Source type
Scholarly Journal
Language of publication
English
DOI
https://doi.org/10.1007/s11166-018-9272-8
ProQuest document ID
1993476577
Copyright
Journal of Risk and Uncertainty is a copyright of Springer, (2018). All Rights Reserved.