Discount rate heterogeneity among older households: a puzzle?

Antoine Bozio, Guy Laroque () and Cormac O’dea
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Guy Laroque: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, UCL - University College of London [London]
Cormac O’dea: Institute for Fiscal Studies

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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 (search for similar items in EconPapers)
Date: 2017
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01513333v1
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Published in Journal of Population Economics, 2017, 30 (2), pp.647 - 680. ⟨10.1007/s00148-016-0623-y⟩

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Related works:
Journal Article: 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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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:halshs-01513333

DOI: 10.1007/s00148-016-0623-y

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