Joint estimation of time and risk preferences using a representative sample of UK households' subjective perceptions of time

Aidan Aungles
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Aidan Aungles: University of Warwick

Warwick-Monash Economics Student Papers from Warwick Monash Economics Student Papers

Abstract: I use real money choices from the Innovation Panel of the UK Household Longitudinal Survey to jointly estimate time and risk preferences via Maximum Likelihood Estimation using dfferent specifications of subjective time. First, survey-elicited individual estimation of subjective time is utilised. Second, I use two sample-level estimations of subjective time based upon psychophysical laws which have been found to hold for the perception of stimuli such as light and heat, and apply them to the perception of time (To clarify, here, the sample's average curvature of subjective time is estimated). These specifications are examined closely and compared to that of objective time. Lastly, I also add to the literature on the heterogeneity of time and risk preferences utilising the wide range of variables available.

Keywords: Discount rate; Risk aversion; Subjective time; Heterogeneity JEL Classification: D81 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-eur
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