Patience and Principles

Abstract

I estimate discount rates for 73 students across three sections of Principles of Macroeconomics at Kenyon College in the Spring 2015 semester. I find that a representative student with a discount rate one standard deviation above the mean earns roughly 2.28 fewer percentage points in the course than the average student. While the magnitude of the effect is small, the result is significant and remains so even after controlling for other observables.

Keywords: Macroeconomics, Discount Rate, Grades, Patience, Time Preference

JEL Classification: A1, A22