Identification of Time-Inconsistent Models: The Case of Insecticide Treated Nets

Aprajit Mahajan, Christian Michel and Alessandro Tarozzi

No 27198, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Time-inconsistency may play a central role in explaining inter-temporal behavior, particularly among poor households. However, little is known about the distribution of time-inconsistent agents, and time-preference parameters are typically not identified in standard dynamic choice models. We formulate a dynamic discrete choice model in an unobservedly heterogeneous population of possibly time-inconsistent agents. We provide conditions under which all population type probabilities and preferences for both time-consistent and sophisticated agents are point-identified and sharp set-identification results for naïve and partially sophisticated agents. Estimating the model using data from a health intervention providing insecticide treated nets (ITNs) in rural Orissa, India, we find that a little over two-thirds of our sample comprises time-inconsistent agents and that both sophisticated and naïve agents are considerably present-biased. Counterfactuals show that the under-investment in ITNs attributable to present-bias leads to substantial costs that are about five times the price of an ITN.

JEL-codes: D9 I1 I3 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-agr and nep-upt
Note: DEV EH IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.nber.org/papers/w27198.pdf (application/pdf)

Related works:
Working Paper: Identification of Time-Inconsistent Models: The Case of Insecticide Treated Nets (2023)
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:nbr:nberwo:27198

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w27198

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().