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“The less you Discount, the more it shows you really care”: Interpersonal discounting in households

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  • Rong, Rong
  • Gnagey, Matthew
  • Grijalva, Therese

Abstract

Household members make monetary tradeoffs across time. Classical economics treats these decisions as if one rational individual makes them. This assumption masks important other regarding concerns between spouses. We designed an artefactual field experiment and collected data from 94 pairs of cohabiting couples to capture the complex nature of intra-household time preferences. Estimation results show that (1) the interpersonal discount rate, the rate used to tradeoff intertemporal payoffs between one's own payoff and the spouse's payoff, is significantly different from the individual discount rate, and (2) the interpersonal discount rate may provide an alternative way for people to express their other-regarding preferences towards their spouses.

Suggested Citation

  • Rong, Rong & Gnagey, Matthew & Grijalva, Therese, 2018. "“The less you Discount, the more it shows you really care”: Interpersonal discounting in households," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 1-23.
    • Handle: RePEc:eee:jeborg:v:154:y:2018:i:c:p:1-23
    DOI: 10.1016/j.jebo.2018.07.020
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    More about this item

    Keywords

    Time preference; Interpersonal discount rate; Intra-household decision making; Field experiment; Convex time budget;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D19 - Microeconomics - - Household Behavior - - - Other
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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