We use data from a survey of residents of five Italian cities conducted in late Spring 2004 to estimate the discount rates implicit in (a) money v. future risk reductions and (b) money v. money tradeoffs. We find that the mean personal discount rate is 2% in (a) and 8.7% in (b). The latter is lower than the discount rates estimated in comparable situations in many recent studies, greater than market interest rates in Italy at the time, and exhibits modest variation with age and gender. The discount rate implicit in money v. risk tradeoffs is in line with estimates from studies in the US and Europe, and does not depend on observable individual characteristics.
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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number
2006.8.
Find related papers by JEL classification: J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
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