Temporal Discounting in Later Life

Ellam Kulati, Michal Myck and Giacomo Pasini

No 15643, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We explore intertemporal decision-making in later life by looking at temporal preference heterogeneity among older individuals. Using choice tasks responses from Poland collected as part of the Survey of Health, Ageing, and Retirement in Europe (SHARE), we elicit individual time preferences using competing discounting specifications. With the formulation that best fits our data, we examine which individual characteristics drive the estimated heterogeneity in later life time preferences. Individual numerical abilities, labour and marital status, as well as household income turn out to be significant correlates of patience. Our analysis also provides methodological guidance for instrument design with the aim of eliciting time preferences in a general survey setting.

Keywords: time preferences; discount rate; present bias; survey methodology; old age (search for similar items in EconPapers)
JEL-codes: C83 D12 D15 J14 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2022-10
New Economics Papers: this item is included in nep-age, nep-eur, nep-lab and nep-tra
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Published - published in: Journal of Economic Behavior and Organization , 2023, 213, 87-101

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Journal Article: Temporal discounting in later life (2023)
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