Is time preference different across incomes and countries?

Vincenzo De Lipsis

Economics Letters, 2021, vol. 201, issue C

Abstract: We offer direct statistical evidence of existing differences in time preference across income classes and countries by estimating and testing an Euler equation for consumption on time series data for six European countries and five income quantiles. We unequivocally reject the hypothesis of homogeneous time preference across countries, whereas heterogeneity across income classes is confirmed to different degrees depending on the country, but with time preference being lowest for the last two quantiles of the income distribution.

Keywords: Time preference; Discount rate; Euler equation; GMM testing (search for similar items in EconPapers)
JEL-codes: C32 C36 E21 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:201:y:2021:i:c:s0165176520304808

DOI: 10.1016/j.econlet.2020.109720

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