Empirical determinants of intertemporal choice

Jeffrey Brown, Zoran Ivković and Scott Weisbenner

Journal of Financial Economics, 2015, vol. 116, issue 3, 473-486

Abstract: We provide new evidence on the empirical determinants of intertemporal financial decisions. We use an exogenously imposed choice affecting nearly all Croatian retirees to study characteristics associated with choosing a larger, deferred stream of payments over a smaller, more immediate payment. Individuals are more willing to defer if they have higher incomes and are not liquidity constrained, have a longer time horizon because of better health and longer life expectancy, and have stronger bequest motives. Individuals who expect currency devaluation or political risk to reduce the value of future income are more likely to take the earlier income stream.

Keywords: Political risk; Intertemporal choice; Discount rate; Social security; Pensions (search for similar items in EconPapers)
JEL-codes: D12 D91 H31 H55 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (15)

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Working Paper: Empirical Determinants of Intertemporal Choice (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:116:y:2015:i:3:p:473-486

DOI: 10.1016/j.jfineco.2015.04.004

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