Individual laboratory-measured discount rates predict field behavior
AbstractWe estimate discount rates of 555 subjects using a laboratory task and find that these individual discount rates predict inter-individual variation in field behaviors (e.g., exercise, BMI, smoking). The correlation between the discount rate and each field behavior is small: none exceeds 0.28 and many are near 0. However, the discount rate has at least as much predictive power as any variable in our dataset (e.g., sex, age, education). The correlation between the discount rate and field behavior rises when field behaviors are aggregated: these correlations range from 0.09-0.38. We present a model that explains why specific intertemporal choice behaviors are only weakly correlated with discount rates, even though discount rates robustly predict aggregates of intertemporal decisions.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Risk and Uncertainty.
Volume (Year): 37 (2008)
Issue (Month): 2 (December)
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Web page: http://www.springerlink.com/link.asp?id=100299
Intertemporal discounting; Intertemporal choice; Impulsiveness; Health; Investment; C; D; I; J;
Other versions of this item:
- Christopher F. Chabris & David Laibson & Carrie L. Morris & Jonathon P. Schuldt & Dmitry Taubinsky, 2008. "Individual Laboratory-Measured Discount Rates Predict Field Behavior," NBER Working Papers 14270, National Bureau of Economic Research, Inc.
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D9 - Microeconomics - - Intertemporal Choice
- I1 - Health, Education, and Welfare - - Health
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