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Joint estimation of time and risk preferences using a representative sample of UK households' subjective perceptions of time

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  • Aungles, Aidan

    (University of Warwick)

Abstract

I use real money choices from the Innovation Panel of the UK Household Longitudinal Survey to jointly estimate time and risk preferences via Maximum Likelihood Estimation using dfferent specifications of subjective time. First, survey-elicited individual estimation of subjective time is utilised. Second, I use two sample-level estimations of subjective time based upon psychophysical laws which have been found to hold for the perception of stimuli such as light and heat, and apply them to the perception of time (To clarify, here, the sample's average curvature of subjective time is estimated). These specifications are examined closely and compared to that of objective time. Lastly, I also add to the literature on the heterogeneity of time and risk preferences utilising the wide range of variables available.

Suggested Citation

  • Aungles, Aidan, 2021. "Joint estimation of time and risk preferences using a representative sample of UK households' subjective perceptions of time," Warwick-Monash Economics Student Papers 01, Warwick Monash Economics Student Papers.
    • Handle: RePEc:wrk:wrkesp:01
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Discount rate ; Risk aversion ; Subjective time ; Heterogeneity JEL Classification: D81;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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