The Endogenous Determination of Time Preference

We model a consumer's efforts to reduce the discount on future utilities. Our analysis shows how wealth, mortality, addictions, uncertainty, and other variables affect the degree of time preference. In addition to working out many implications of the model, we discuss evidence on consumption, s...

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Bibliographic Details
Published in:The Quarterly journal of economics 1997-08, Vol.112 (3), p.729-758
Main Authors: Becker, Gary S., Mulligan, Casey B.
Format: Article
Language:English
Subjects:
Capital investments
Consumer behavior
Consumer economics
Consumer preferences
Economic growth models
Economic models
Economic utility
Income inequality
Investments
Marginal utility
Modeling
Pleasure
Preferences
Savings
Studies
Time
Utility functions
Wealth
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Summary:We model a consumer's efforts to reduce the discount on future utilities. Our analysis shows how wealth, mortality, addictions, uncertainty, and other variables affect the degree of time preference. In addition to working out many implications of the model, we discuss evidence on consumption, savings, equilibrium, and the dynamics of inequality. We claim that most ofthat evidence is consistent with the predictions of our approach.
ISSN:0033-5533
1531-4650
DOI:10.1162/003355397555334