TY - JOUR
T1 - Measuring time preferences
AU - Cohen, Jonathan
AU - Ericson, Keith Marzilli
AU - Laibson, David
AU - White, John Myles
N1 - Funding Information:
*Cohen: Princeton University. Ericson: Boston University Questrom School of Business and NBER. Laibson: NBER and Harvard University. White: Princeton University. We thank Steven Durlauf and five anonymous referees at the Journal of Economic Literature for thoughtful comments. We thank Layne Kirshon, Omeed Maghzian, Lea Nagel, and Kartik Vira for outstanding research assistance. We acknowledge financial support from the National Institutes of Health (NIA R01AG021650 and P01AG005842) and the Pershing Square Fund for Research in the Foundations of Human Behavior.
Publisher Copyright:
© 2020 American Economic Association. All rights reserved.
PY - 2020/6
Y1 - 2020/6
N2 - We review research that measures time preferences i.e., preferences over intertemporal trade-offs. We distinguish between studies using financial flows, which we call "money earlier or later" (MEL) decisions, and studies that use time-dated consumption/ effort. Under different structural models, we show how to translate what MEL experiments directly measure (required rates of return for financial flows) into a discount function over utils. We summarize empirical regularities found in MEL studies and the predictive power of those studies. We explain why MEL choices are driven in part by some factors that are distinct from underlying time preferences. ( JEL C61, D15).
AB - We review research that measures time preferences i.e., preferences over intertemporal trade-offs. We distinguish between studies using financial flows, which we call "money earlier or later" (MEL) decisions, and studies that use time-dated consumption/ effort. Under different structural models, we show how to translate what MEL experiments directly measure (required rates of return for financial flows) into a discount function over utils. We summarize empirical regularities found in MEL studies and the predictive power of those studies. We explain why MEL choices are driven in part by some factors that are distinct from underlying time preferences. ( JEL C61, D15).
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U2 - 10.1257/JEL.20191074
DO - 10.1257/JEL.20191074
M3 - Article
AN - SCOPUS:85093876764
SN - 0022-0515
VL - 58
SP - 299
EP - 347
JO - Journal of Economic Literature
JF - Journal of Economic Literature
IS - 2
ER -