Time Discounting and Economic Decision-making Among the Elderly

David Huffman, Raimond Maurer and Olivia Mitchell

No 22438, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper evaluates the extent of heterogeneity in time discounting among elderly Americans, as well as its role in explaining older peoples’ key behaviors. We first show how older Americans evaluate simple (hypothetical) intertemporal choices in which payments now are compared with payments in the future. This adds to the literature on time horizon experiments by focusing on a nationally representative sample of persons age 70+. Using the indicators derived from this experiment, we show how differences in discounting patterns are associated with characteristics of particular importance in elderly populations, such as serious health and mental conditions. We then relate our discounting measure to key outcome variables including wealth, the timing of retirement, investments in health, and decisions about end of life care.

JEL-codes: D01 D03 D12 D14 E21 G11 I12 J26 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-age, nep-lma and nep-mac
Note: AG
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Citations: View citations in EconPapers (8)

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Working Paper: Time Discounting and Economic Decision-making among the Elderly (2016)
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