Measuring time preferences

Jonathan Cohen, Keith Marzilli Ericson, David Laibson, John Myles White

Research output: Contribution to journalArticlepeer-review

15 Scopus citations

Abstract

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).

Original languageEnglish (US)
Pages (from-to)299-347
Number of pages49
JournalJournal of Economic Literature
Volume58
Issue number2
DOIs
StatePublished - Jun 2020

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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