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Temporal Discounting in Later Life

Author

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  • Kulati, Ellam

    (Warsaw University)

  • Myck, Michal

    (Centre for Economic Analysis, CenEA)

  • Pasini, Giacomo

    (Ca' Foscari University of Venice)

Abstract

We explore intertemporal decision-making in later life by looking at temporal preference heterogeneity among older individuals. Using choice tasks responses from Poland collected as part of the Survey of Health, Ageing, and Retirement in Europe (SHARE), we elicit individual time preferences using competing discounting specifications. With the formulation that best fits our data, we examine which individual characteristics drive the estimated heterogeneity in later life time preferences. Individual numerical abilities, labour and marital status, as well as household income turn out to be significant correlates of patience. Our analysis also provides methodological guidance for instrument design with the aim of eliciting time preferences in a general survey setting.

Suggested Citation

  • Kulati, Ellam & Myck, Michal & Pasini, Giacomo, 2022. "Temporal Discounting in Later Life," IZA Discussion Papers 15643, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15643
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    More about this item

    Keywords

    time preferences; discount rate; present bias; survey methodology; old age;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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