Estimating Individual Discount Rates in Denmark: A Field Experiment

Individual discount rates are estimated with respect to time streams of money using controlled laboratory experiments. These discount rates are elicited by means of field experiments involving real monetary rewards. The experiments were carried out across Denmark using a representative sample of 268...

Full description

Saved in:
Bibliographic Details
Published in:The American economic review 2002-12, Vol.92 (5), p.1606-1617
Main Authors: Harrison, Glenn W., Lau, Morten I., Williams, Melonie B.
Format: Article
Language:English
Subjects:
Borrowing
Case studies
Censorship
Children
Cost control
Cost-benefit analysis
Credit cards
Demographics
Demography
Denmark
Discount rates
Economic theory
Economics
Estimates
Estimation
Experiments
Household economics
Households
Hypotheses
Interest rates
Lines of credit
Market prices
Regression analysis
Shorter Papers
Sociodemographics
Socioeconomic factors
Statistical analysis
Studies
Tax payments
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Individual discount rates are estimated with respect to time streams of money using controlled laboratory experiments. These discount rates are elicited by means of field experiments involving real monetary rewards. The experiments were carried out across Denmark using a representative sample of 268 people between 19 and 75 years of age. Individual discount rates are estimated for various households differentiated by socio-demographic characteristics such as income or age. It is concluded that discount rates are constant over the 6-month to 3-year horizons used in these experiments, that discount rates vary with respect to several socio-demographic variables, and that they decline with age after middle age. It would be reasonable to assume constant discount rates for specific household types, but not the same rates across all households.
ISSN:0002-8282
1944-7981
DOI:10.1257/000282802762024674