Eliciting Individual-Specific Discount Rates
Trudy Ann Cameron
University of Oregon - Department of Economics
Geoffrey R. Gerdes
Board of Governors of the Federal Reserve System
January 1, 2003
University of Oregon Economics Working Paper No. 2003-10
Longstanding debate over the appropriate social discount rate for public projects stems from our lack of knowledge about how individual discount rates vary across people and across choice contexts. Using a sample of roughly 15,000 choices by over 2000 individuals, we estimate utility theoretic models concerning private tradeoffs involving money over time that reveal individual specific discount rates. We control for experimentally differentiated choice scenarios, sociodemographic heterogeneity, and elicitation formats, and complex forms of heteroscedasticity. Statistically significant heterogeneity in discount rates is quantified for both an exponential discounting model and a competing hyperbolic model, but neither specification clearly dominates.
Number of Pages in PDF File: 49
JEL Classification: D91, H4, C25, C35working papers series
Date posted: November 4, 2003
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 0.406 seconds