(Im)Patience Among Adolescents: A Methodological Note
16 Pages Posted: 12 Jul 2011
Date Written: August 18, 2010
Time preference is a fundamental component of many economic models and questions of interest. Yet, elicited preferences are frequently questioned on the grounds of potentially confounding elements of the experimental design, such as trust in the experimenter. We report on a time preference experiment using a sample of 490 high school students from Houston, TX and St. Cloud, MN. We find no relationship between confidence in receiving payment from the experimenters and the intertemporal allocation decisions. However, we find an illogical result for this population: reverse hyperbolic discounting. On aggregate the students are more likely to be impatient as choices are moved further into the future. However, this aggregate result is driven by heterogeneity in the home environment: For a subset of our population, elicited time preferences reflect increasing impatience as the decisions are farther in the future: These individuals come from home environments with factors that decrease the likelihood that they will receive the later payments. Once this heterogeneity is accounted for, the population is, on average, exponentially discounting. Results indicate that caution is warranted when trying to generalize results based on the convenience sample of university undergraduates to other populations. Further, results highlight the importance of accounting for preference heterogeneity within and across samples.
Keywords: Time preference, Field experiment, Teen
JEL Classification: C93, D91
Suggested Citation: Suggested Citation