Eliciting Individual-Specific Discount Rates

Trudy Cameron () and Geoffrey Gerdes

University of Oregon Economics Department Working Papers from University of Oregon Economics Department

Abstract: Longstanding debate over the appropriate social discount rate for public projects stems from our lack of knowledge about how individual discount rates vary across people and across choice contexts. Using a sample of roughly 15,000 choices by over 2000 individuals, we estimate utility theoretic models concerning private tradeoffs involving money over time that reveal individual specific discount rates. We control for experimentally differentiated choice scenarios, sociodemographic heterogeneity, and elicitation formats, and complex forms of heteroscedasticity. Statistically significant heterogeneity in discount rates is quantified for both an exponential discounting model and a competing hyperbolic model, but neither specification clearly dominates.

JEL-codes: C25 C35 D91 H4 (search for similar items in EconPapers)
Pages: 49
Date: 2003-01-01, Revised 2003-01-01
New Economics Papers: this item is included in nep-cdm
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Persistent link: https://EconPapers.repec.org/RePEc:ore:uoecwp:2003-10

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