A systematic review of unique methods for measuring discount rates

Stefan A. Lipman () and Arthur Attema
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Stefan A. Lipman: Erasmus University Rotterdam

Journal of Risk and Uncertainty, 2024, vol. 69, issue 2, No 2, 145-189

Abstract: Abstract Discount rates play a pivotal role in various fields, capturing the trade-off between present and future, influencing predictions of unhealthy behaviors. Despite substantial variations in discount rates across studies, methods, and individuals, our goal was to systematically overview diverse methods for measuring discount rates. We conducted a comprehensive literature review across multiple databases, targeting English studies introducing and utilizing discounting measurement methods in human subjects. Two authors screened titles and abstracts, with full text review split between them. Extracted data encompassed bibliographic details, theoretical aspects (e.g., discount function), and operational features (e.g., elicitation procedure). After deduplication, 4976, 218, and 83 records underwent title and abstract screening, full text screening, and inclusion, respectively. A total of 86 unique methods were identified. Predominantly, methods were devised for money (75%) and health (22%) discounting. Network analysis on citations indicated limited cross-disciplinary overlap. Only about one fourth, one third, and one third of methods possessed theoretically desirable traits: i) allowance for negative discount rates, ii) application of multiple discount functions, and iii) correction for non-linear utility of outcomes. Diverse discounting measurement methods exist, showcasing varied theoretical and operational characteristics. These differences may stem from the isolation of development in fields like psychology, experimental economics, and health economics. Our systematic review aids readers in choosing methods aligned with their priorities when measuring discount rates.

Keywords: Time preferences; Discounting; Health; Systematic review; Measurement methods (search for similar items in EconPapers)
JEL-codes: D90 I10 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11166-024-09439-1

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