Can Hypothetical Time Discounting Rates Predict Actual Behaviour: Evidence from a Randomized Experiment

Jacopo Bonan, Philippe LeMay-Boucher and Douglas Scott

No 250259, MITP: Mitigation, Innovation and Transformation Pathways from Fondazione Eni Enrico Mattei (FEEM)

Abstract: This paper estimates time preference parameters using commonly-applied methodologies, with the aim of investigating the link between these measures and actual economic behaviour. An experiment was conducted in the city of Thies, in Senegal, using the unique reference numbers of banknotes as a means of determining an individual’s willingness to save money. The findings of this experiment provide an innovative comparison between real choices, and choices made in the presence of hypothetical rewards. Our research indicates that individuals display a far greater degree of patience, when the possibility of genuine financial gain is made available to them. Our results show that hypothetical time preferences parameters are poor predictors of actual behaviour, prompting questions over the validity of commonly used measurements.

Keywords: Research; Methods/; Statistical; Methods (search for similar items in EconPapers)
Pages: 37
Date: 2016-12-15
New Economics Papers: this item is included in nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/250259/files/NDL2016-074.pdf (application/pdf)

Related works:
Working Paper: Can Hypothetical Time Discounting Rates Predict Actual Behaviour: Evidence from a Randomized Experiment (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:feemmi:250259

DOI: 10.22004/ag.econ.250259

Access Statistics for this paper

More papers in MITP: Mitigation, Innovation and Transformation Pathways from Fondazione Eni Enrico Mattei (FEEM) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().