The prevalence of hyperbolic discounting: some European evidence
Experimental matching data are used from the 2000 Bank of Italy Survey of Household Income and Wealth (SHIW) and the 2000 wave of the Center for Economic Research (CentER) Savings Survey at Tilburg University to compare the relative frequencies of hyperbolic and exponential discounters. Among 3200 Italian respondents and 1400 Dutch respondents, less than a quarter exhibited hyperbolic discounting. This finding is both statistically significant and robust with respect to various assumptions regarding utility; moreover, it holds across a wide variety of economic, social and demographic characteristics. The youngest, poorest, most urban and least educated individuals are the most likely to be hyperbolic discounters. In addition, it is found that hyperbolic discounters accumulate less wealth and are somewhat less likely than exponential discounters to utilize commitment devices to constrain their future choices.
Volume (Year): 38 (2006)
Issue (Month): 11 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Malmendier, Ulrike M. & Della Vigna, Stefano, 2002.
"Overestimating Self-Control: Evidence from the Health Club Industry,"
1880, Stanford University, Graduate School of Business.
- Stefano DellaVigna & Ulrike Malmendier, 2004. "Overestimating Self_Control: Evidence from the Health Club Industry," NBER Working Papers 10819, National Bureau of Economic Research, Inc.
- Malmendier, Ulrike M. & Della Vigna, Stefano, 2003. "Overestimating Self-Control: Evidence from the Health Club Industry," Research Papers 1800, Stanford University, Graduate School of Business.
- Uri Benzion & Yochanan Shachmurove & Joseph Yagil, 2004. "Subjective discount functions - an experimental approach," Applied Financial Economics, Taylor & Francis Journals, vol. 14(5), pages 299-311.
- Maribeth Coller & Melonie Williams, 1999. "Eliciting Individual Discount Rates," Experimental Economics, Springer, vol. 2(2), pages 107-127, December.
- Laibson, David I., 1997.
"Golden Eggs and Hyperbolic Discounting,"
4481499, Harvard University Department of Economics.
- Magnus Johannesson & Bengt Liljas & Richard O'Conor, 1997. "Hypothetical versus real willingness to pay: some experimental results," Applied Economics Letters, Taylor & Francis Journals, vol. 4(3), pages 149-151.
- Gonzalo Edwards, 2002.
"The Effect of a Constant or a Declining Discount Rate on Optimal Investment Timing,"
Documentos de Trabajo
227, Instituto de Economia. Pontificia Universidad Católica de Chile..
- Gonzalo Edwards, 2003. "The effect of a constant or a declining discount rate on optimal investment timing," Applied Economics Letters, Taylor & Francis Journals, vol. 10(10), pages 657-659.
- George-Marios Angeletos, 2001. "The Hyberbolic Consumption Model: Calibration, Simulation, and Empirical Evaluation," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 47-68, Summer.
- Luigi Ventura, 2003. "Direct Measures of Time Preference," The Economic and Social Review, Economic and Social Studies, vol. 34(3), pages 293–310.
- Uri Benzion & Amnon Rapoport & Joseph Yagil, 1989. "Discount Rates Inferred from Decisions: An Experimental Study," Management Science, INFORMS, vol. 35(3), pages 270-284, March.
- Arnab K. Acharya & Ronald J. Balvers, 2004. "Time Preference and Life Cycle Consumption with Endogenous Survival," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 667-678, October.
- Lowenstein, George & Prelec, Drazen, 1991. "Negative Time Preference," American Economic Review, American Economic Association, vol. 81(2), pages 347-52, May.
- Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
- Miles S. Kimball, 1990. "Precautionary Saving and the Marginal Propensity to Consume," NBER Working Papers 3403, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:38:y:2006:i:11:p:1223-1234. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.