Nonparametric Analysis of Time-Inconsistent Preferences
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Nonparametric Analysis of Time-Inconsistent Preferences. / Blow, Laura; Browning, Martin; Crawford, Ian.
I: Review of Economic Studies, Bind 88, Nr. 6, 2021, s. 2687-2734.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Nonparametric Analysis of Time-Inconsistent Preferences
AU - Blow, Laura
AU - Browning, Martin
AU - Crawford, Ian
PY - 2021
Y1 - 2021
N2 - 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.
AB - 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.
KW - quasi-hyperbolic discounting
KW - revealed preference
KW - Quasi-hyperbolic discounting
KW - evealed preference
KW - D11
KW - D12
KW - D20
U2 - 10.2139/ssrn.3524795
DO - 10.2139/ssrn.3524795
M3 - Journal article
VL - 88
SP - 2687
EP - 2734
JO - Review of Economic Studies
JF - Review of Economic Studies
SN - 0034-6527
IS - 6
ER -
ID: 248553824