Estimating Time Preferences for Leisure

59 Pages Posted: 27 Sep 2021

See all articles by Maria Bigoni

Maria Bigoni

University of Bologna - Department of Economics; IZA Institute of Labor Economics

Davide Dragone

University of Bologna - Department of Economics

Stéphane Luchini

University of Toulouse 3, Paul Sabatier University - Centre National de la Recherche Scientifique (CNRS); Université Paul Cézanne Aix Marseille, EHESS

Alberto Prati

Aix-Marseille University

Multiple version iconThere are 2 versions of this paper

Date Written: July 2021

Abstract

We study time preferences by means of a longitudinal lab experiment involving both monetary and non-monetary rewards (leisure). Our novel design allows to measure whether participants prefer to anticipate or delay gratification, without imposing any structural assumption on the instantaneous utility, intertemporal utility or the discounting functions. We find that most people prefer to anticipate monetary rewards (positive time preferences for money), but they delay non-monetary rewards (negative time preferences for leisure). These results cannot be explained by personal timetables and heterogeneous preferences only. They invite to reconsider the psychological interpretation of the discount factor, and suggest that the assumption that discounting is consistent across domains can lead to non-negligible prediction errors in models involving non-monetary decisions, such as labor supply models.

Keywords: consistency across domains, laboratory experiment, negative discounting, Non-monetary rewards

JEL Classification: C91, D01, D91, J22

Suggested Citation

Bigoni, Maria and Dragone, Davide and Luchini, Stéphane and Luchini, Stéphane and Prati, Alberto, Estimating Time Preferences for Leisure (July 2021). CEPR Discussion Paper No. DP16367, Available at SSRN: https://ssrn.com/abstract=3928645

Maria Bigoni (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, Bologna 40126
Italy
+390512098134 (Phone)

HOME PAGE: http://https://www.unibo.it/sitoweb/maria.bigoni/en

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Davide Dragone

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy
0039.051.2098880 (Phone)

HOME PAGE: http://https://www.unibo.it/sitoweb/davide.dragone/en

Stéphane Luchini

Université Paul Cézanne Aix Marseille, EHESS ( email )

3, Avenue Robert Schuman
Aix-en-Provence Cedex 1, Aix en Provence 13628
France

University of Toulouse 3, Paul Sabatier University - Centre National de la Recherche Scientifique (CNRS) ( email )

Toulouse
France

Alberto Prati

Aix-Marseille University

3 Avenue Robert Schuman
3 Avenue Robert Schuman,
Aix-en-Provence, 13628
France

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