Discount rate heterogeneity among older households: a puzzle?

Antoine Bozio, Guy Laroque and Cormac O’Dea ()
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Cormac O’Dea: Institute for Fiscal Studies (IFS)
Authors registered in the RePEc Author Service: Cormac O'Dea

Journal of Population Economics, 2017, vol. 30, issue 2, No 9, 647-680

Abstract: Abstract We put forward a method for estimating discount rates using wealth and income data. We build consumption from these data using the budget constraint. Consumption transitions yield discount rates by household groups. Applying this technique to a sample of older households, we find a similar distribution to those previously estimated using field data, though with a much lower mean than those found using experiments. Surprisingly, among this older population, patience is negatively correlated with education and numeracy. This goes against the positive correlation found for younger populations in experiments and some field studies. We discuss potential explanations for this result.

Keywords: Time preference; Discount rate; Consumption; D12; D31; D91; E21 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (8)

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Working Paper: Discount rate heterogeneity among older households: a puzzle? (2017)
Working Paper: Discount rate heterogeneity among older households: a puzzle? (2017)
Working Paper: Discount rate heterogeneity among older households: a puzzle? (2017)
Working Paper: Discount Rate Heterogeneity Among Older Households: A Puzzle? (2013)
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DOI: 10.1007/s00148-016-0623-y

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