Which Measures of Time Preference Best Predict Outcomes? Evidence from a Large-Scale Field Experiment
AbstractEconomists and psychologists have devised numerous instruments to measure time preferences and have generated a rich literature examining the extent to which time preferences predict important outcomes; however, we still do not know which measures work best. With the help of a large sample of non-student participants (truck driver trainees) and administrative data on outcomes, we gather four different time preference measures and test the extent to which they predict both on their own and when they are all forced to compete head-to-head. Our results suggest that the now familiar (β, δ) formulation of present bias and exponential discounting predicts best, especially when both parameters are used.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5808.
Length: 26 pages
Date of creation: Jun 2011
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Other versions of this item:
- Burks, Stephen & Carpenter, Jeffrey & Götte, Lorenz & Rustichini, Aldo, 2012. "Which measures of time preference best predict outcomes: Evidence from a large-scale field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 308-320.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D90 - Microeconomics - - Intertemporal Choice and Growth - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-13 (All new papers)
- NEP-CBE-2011-07-13 (Cognitive & Behavioural Economics)
- NEP-EXP-2011-07-13 (Experimental Economics)
- NEP-UPT-2011-07-13 (Utility Models & Prospect Theory)
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