Nonparametric Analysis of Time-Inconsistent Preferences
Martin Browning and
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Laura Blow: School of Economics, University of Surrey, UK
No 20-03, CEBI working paper series from University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI)
This paper provides a revealed preference characterisation of quasi-hyperbolic discounting which is designed to be applied to readily-available expenditure surveys. We describe necessary and sufficient conditions for the leading forms of the model and also study the consequences of the restrictions on preferences popularly used in empirical lifecycle consumption models. Using data from a household consumption panel dataset we explore the prevalence of time-inconsistent behaviour. The quasi-hyperbolic model provides a significantly more successful account of behaviour than the alternatives considered. We estimate the joint distribution of time preferences and the distribution of discount functions at various time horizons.
Keywords: Quasi-hyperbolic discounting; revealed preference (search for similar items in EconPapers)
JEL-codes: D11 D12 D90 (search for similar items in EconPapers)
Pages: 60 pages
New Economics Papers: this item is included in nep-gen and nep-ore
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Journal Article: Non-parametric Analysis of Time-Inconsistent Preferences (2021)
Working Paper: Nonparametric Analysis of Time-Inconsistent Preferences (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kucebi:2003
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