Time preferences and consumer behavior

David Bradford, Charles Courtemanche, Garth Heutel, Patrick McAlvanah, Christopher Ruhm

Research output: Contribution to journalArticlepeer-review

81 Scopus citations

Abstract

We investigate the predictive power of survey-elicited time preferences. The discount factor elicited from choice experiments using real payments predicts various health, energy, and financial outcomes, including overall self-reported health, smoking, installing energy-efficient lighting, and credit card balance. Allowing for time-inconsistent preferences, both the long-run and present-bias discount factors (δ and β) are also significantly associated in the expected direction with several outcomes. We consider several hypotheses regarding the strength of the association between discount factors and outcomes, such as salience of the outcome or liquidity constraints.

Original languageEnglish
Pages (from-to)119-145
Number of pages27
JournalJournal of Risk and Uncertainty
Volume55
Issue number2-3
DOIs
StatePublished - Dec 1 2017

Bibliographical note

Publisher Copyright:
© 2018, Springer Science+Business Media, LLC, part of Springer Nature.

Keywords

  • Discounting
  • Energy
  • Health
  • Present bias
  • Risk and time
  • Time preferences
  • Time-inconsistency

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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