Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/207361
Authors: 
Cheung, Stephen L.
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers 12535
Abstract: 
This paper examines the effects of alternative assumptions regarding the curvature of utility upon estimated discount rates in experimental data. To do so, it introduces a novel design to elicit time preference building upon a translation of the Holt and Laury method for risk. The results demonstrate that utility elicited directly from choice over time is significantly concave, but far closer to linear than utility elicited under risk. As a result, the effect of adjusting discount rates for this curvature is modest compared to assuming linear utility, and considerably less than when utility from a risk preference task is imposed.
Subjects: 
time preference
measurement of utility
discounted utility
choice list
JEL: 
C91
D01
D90
Document Type: 
Working Paper

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