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Individual laboratory-measured discount rates predict field behavior

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  • Christopher Chabris
  • David Laibson
  • Carrie Morris
  • Jonathon Schuldt
  • Dmitry Taubinsky

Abstract

We 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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Suggested Citation

  • Christopher Chabris & David Laibson & Carrie Morris & Jonathon Schuldt & Dmitry Taubinsky, 2008. "Individual laboratory-measured discount rates predict field behavior," Journal of Risk and Uncertainty, Springer, vol. 37(2), pages 237-269, December.
    • Handle: RePEc:kap:jrisku:v:37:y:2008:i:2:p:237-269
    DOI: 10.1007/s11166-008-9053-x
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    More about this item

    Keywords

    Intertemporal discounting; Intertemporal choice; Impulsiveness; Health; Investment; C; D; I; J;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • I1 - Health, Education, and Welfare - - Health

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