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Subjective time discount rates among teenagers and adults: Evidence from Israel

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Author Info

  • Lahav, Eyal
  • Benzion, Uri
  • Shavit, Tal

Abstract

This study is an empirical examination of the personal discount rates used by teenagers and adults. The participants answered a time-preference questionnaire and were asked about the bank interest paid for deposits. The results demonstrate that teenagers have a very high personal discount rate in comparison to adults. In addition, we found that receiving a regular allowance increases the teenagers' willingness to wait. Our results indicate that the influence of teenagers' poor financial knowledge, which ought to increase the personal discount rate, is stronger than the effect of their safety net that should reduce the personal discount rate.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 39 (2010)
Issue (Month): 4 (August)
Pages: 458-465

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Handle: RePEc:eee:soceco:v:39:y:2010:i:4:p:458-465

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Web page: http://www.elsevier.com/locate/inca/620175

Related research

Keywords: Time preference Discount rates Teenagers Cushion effect;

References

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Citations

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Cited by:
  1. Shavit, Tal & Lahav, Eyal & Benzion, Uri, 2013. "Factors affecting soldiers’ time preference: A field study in Israel," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 75-84.
  2. Dara N. Lee, 2011. "The Impact of Repealing Sunday Closing Laws on Educational Attainment," Working Papers 1117, Department of Economics, University of Missouri.
  3. Tatiana Kossova & Elena Kossova & Maria Sheluntcova, 2012. "Estimating the relationship between rate of time preferences and socio-economic factors in Russia," HSE Working papers WP BRP 23/EC/2012, National Research University Higher School of Economics.

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