Discrete Choice Estimation of Time Preferences

Miguel Ballester and Jose Apesteguia

No 787, Working Papers from Barcelona School of Economics

Abstract: Discrete choice methods are often used for the estimation of time preferences. We show that these methods have pervasive problems when based on random utility models, for which cases our results establish that the probability of selecting a later option over an earlier one may be greater for higher levels of impatience. This could have profound implications, not only in the experimental estimation of time preferences, but also in a wide variety of empirical papers using such models in dynamic settings. Alternatively, we also show that discrete choice methods built on random preference models are always free of all such problems.

Keywords: structural estimation; discrete choice; time; discounting; random utility models; random preference models (search for similar items in EconPapers)
JEL-codes: C25 D90 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-dcm and nep-upt
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Discrete choice estimation of time preferences (2014)
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