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Temporal Stability of Time Preferences

Author

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  • Stephan Meier

    () (Columbia University)

  • Charles D. Sprenger

    () (Stanford University)

Abstract

The preferences assumed to govern intertemporal trade-offs are generally considered to be stable economic primitives, though evidence on this stability is notably lacking. We present evidence from a large field study conducted over two years, with around 1,400 individuals using incentivized intertemporal choice experiments. Aggregate choice profiles and corresponding estimates of discount parameters are unchanged over the two years and individual correlations through time are high by existing standards. However, some individuals show signs of instability. By linking experimental measures to administrative tax records, we show that identified instability is uncorrelated with both levels and changes in sociodemographic variables. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Stephan Meier & Charles D. Sprenger, 2015. "Temporal Stability of Time Preferences," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 273-286, May.
  • Handle: RePEc:tpr:restat:v:97:y:2015:i:2:p:273-286
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    Keywords

    stable economic primitives; intertemporal; aggregate choice; sociodemographic;

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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