Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149207
Authors: 
Belzil, Christian
Sidibé, Modibo
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10348
Abstract: 
Using a unique field experiment from Canada, we estimate individual preference over risk and time and show considerable heterogeneity in both dimensions and relatively stable distributions across our various specifications, which include hyperbolic, quasi-hyperbolic discounting as well as subjective failure probability over future payments. We investigate the predictive power (transportability) of the estimated preference parameters when used to explain the take-up decision of higher education grants where financial stakes are approximately seven to fifty times larger than the cash transfers used to elicit preferences. We find that both long-run discount factors and subjective payment failure risk parameters have a high degree of transportability across tasks, while parameters characterizing short-run discount preferences are irrelevant when considering higher-stakes decisions.
Subjects: 
discounting
risk aversion
time inconsistency
transportability
JEL: 
C91
D12
D81
Document Type: 
Working Paper

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