Present-Biased Preferences and Credit Card Borrowing

Stephan Meier and Charles Sprenger

No 4198, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Some individuals borrow extensively on their credit cards. This paper tests whether present-biased time preferences correlate with credit card borrowing. In a field study, we elicit individual time preferences with incentivized choice experiments, and match resulting time preference measures to individual credit reports and annual tax returns. The results indicate that present-biased individuals are more likely to have credit card debt, and have significantly higher amounts of credit card debt, controlling for disposable income, other socio-demographics, and credit constraints.

Keywords: field experiment; credit card borrowing; dynamic inconsistency; time preferences (search for similar items in EconPapers)
JEL-codes: C93 D12 D14 D91 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2009-05
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: American Economic Journal: Applied Economics, 2010, 2 (1), 193-210

Downloads: (external link)
https://docs.iza.org/dp4198.pdf (application/pdf)

Related works:
Journal Article: Present-Biased Preferences and Credit Card Borrowing (2010)
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:iza:izadps:dp4198

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().