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Title:Present-biased preferences and credit card borrowing PDF Logo
Authors:Meier, Stephan
Sprenger, Charles D.
Issue Date:2009
Series/Report no.:IZA discussion papers 4198
Abstract:Some individuals borrow extensively on their credit cards. This paper tests whether present-biased time preferences correlate with credit card borrowing. In a field study, we elicit individual time preferences with incentivized choice experiments, and match resulting time preference measures to individual credit reports and annual tax returns. The results indicate that present-biased individuals are more likely to have credit card debt, and have significantly higher amounts of credit card debt, controlling for disposable income, other socio-demographics, and credit constraints.
Subjects:Time preferences
dynamic inconsistency
credit card borrowing
field experiment
JEL:D12
D14
D91
C93
Persistent Identifier of the first edition:urn:nbn:de:101:1-20090615131
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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