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Time Preference over the Life-Cycle: Expanding Saver’s Rationality

Author

Listed:
  • Luc Arrondel

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique)

  • André Masson

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique)

Abstract

The existence of a pure and rational (time consistent) preference over the life cycle is problematic. We propose an ‘existential’ approach to time preference where the subject only cares about his ‘future selves’ insofar as his reasons for living today that involve those selves: his time preference is inversely proportional to the robustness and scope of his current life projects. The empirical measure of such a preference involves building ordinal scores derived from a series of questions, mostly concrete or relating to everyday life. We obtain overall stability of time preference over the medium term, from 2007 to 2020 (until the first Covid lockdown). The variations in this preference for the same individual panel member appear poorly explained by usual covariates, apart from a negative effect of age and of getting married.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Luc Arrondel & André Masson, 2024. "Time Preference over the Life-Cycle: Expanding Saver’s Rationality," PSE-Ecole d'économie de Paris (Postprint) hal-04824201, HAL.
    • Handle: RePEc:hal:pseptp:hal-04824201
    DOI: 10.1007/978-3-031-64273-9_2
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