Non-parametric Analysis of Time-Inconsistent Preferences

• Laura Blow ^[1] ; Martin Browning ^[3] ; Ian Crawford ^[2]
  1. [1] University of Surrey

     University of Surrey

     Guildford District, Reino Unido

     
  2. [2] University of Oxford

     University of Oxford

     Oxford District, Reino Unido

     
  3. [3] CEBI, Økonomisk Institut, Københavns Universitet

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• Localización: Review of economic studies, ISSN 0034-6527, Vol. 88, Nº 6, 2021, págs. 2687-2734
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • This article 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.