Discount rate heterogeneity among older households: a puzzle?
Journal article: We put forward a method for estimating discount rates using wealth and income data. We build consumption from these data using the budget constraint. Consumption transitions yield discount rates by household groups. Applying this technique to a sample of older households, we find a similar distribution to those previously estimated using field data, though with a much lower mean than those found using experiments. Surprisingly, among this older population, patience is negatively correlated with education and numeracy. This goes against the positive correlation found for younger populations in experiments and some field studies. We discuss potential explanations for this result.
Author(s)
Antoine Bozio, Guy Laroque, Cormac O’dea
Journal
- Journal of Population Economics
Date of publication
- 2017
Keywords JEL
Keywords
- Time preference
- Discount rate
- Consumption
Pages
- 647 – 680
URL of the HAL notice
Version
- 1
Volume
- 30