Estimating Individual Discount Rates in Denmark: A Field Experiment

By Glenn W. Harrison, Morten I. Lau, Melonie B. Williams. 2002

1,097 citations recorded by the source corpus.

We estimate individual discount rates with respect to time streams of money using controlled laboratory experiments. These discount rates are elicited by means of field experiments involving real monetary rewards. The experiments were carried out across Denmark using a representative sample of 268 people between 19 and 75 years of age. Individual discount rates are estimated for various households differentiated by socio-demographic characteristics such as income and age. Our conclusions are that discount rates are constant over the 12-month to 3-year horizons used in these experiments, and that discount rates vary substantially with respect to several socio-demographic variables. Hence we conclude that it would be reasonable to assume constant discount rates for specific household types, but not the same rates across all households.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/0eb1ddad748b091730166f7de78420bc98312cbf

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Citations in the corpus

Willpower and the Optimal Control of Visceral Urges (2012, neutral): “(20) Ẇ (t) = γM (t)− f (21) Ṁ (t) = f − σM (t) (22)”
MEASURING INEQUITY AVERSION IN A HETEROGENEOUS POPULATION USING EXPERIMENTAL DECISIONS AND SUBJECTIVE PROBABILITIES (2008, background): “…than a convenience sample of students as used in much of the experimental literature, we follow the recent trend that has been established in the literature, e.g., Harrison, Lau, and Williams (2002).1 This broad sample permits us to look into the issue of heterogeneity in preferences and beliefs.”
Associations between a one-shot delay discounting measure and age, income, education and real-world impulsive behavior (2009, background): “education and delay discounting in smokers (see also Harrison et al., 2002 ).”
Patience as a Political Virtue: Delayed Gratification and Turnout (2006, methodology): “It should be noted that just like previous experiments using this method (Coller & Williams, 1999; Harrison et al., 2002), the expected value of the prize to each subject in this experiment is quite low (approximately $100/N % $0.40 to each subject).”
Experimental Methods and Elicitation of Values (2004, methodology): “First, to elicit from subjects those valuations for a commodity which they had upon arriving at the experiment, one should use one-shot institutions rather than repeated institutions with the same good.23 In our example, based on Hoffman et al. (1993), we found significant effects of the lagged sell”
Estimating Time Preferences from Convex Budgets (2012, methodology): “15 For a discussion of order effects and presenting choices by increasing interest rate, see Harrison et al. (2005). 16 Individuals were not told the gross interest rate, (1 + r).”
Temporal Stability of Time Preferences (2015, methodology): “For comparison, Tanaka et al. (2010) find that older and wealthier individuals are more patient, and Harrison et al. (2002) find that more educated individuals are more patient.”
Risk Aversion in the Laboratory (2008, result): “Andersen et al. (2008a) do this, and infer discount rates for the adult Danish population that are well below those estimated in the previous literature that assumed RN, such as Harrison, Lau, and Williams (2002), who estimated annualized rates of 28.1% for the same target population.”
Trust, Risk, and Time Preferences After a Natural Disaster: Experimental Evidence from Thailand (2017, result): “The task dummies show that the CRRA vary somewhat across the tasks, similar to the findings of Holt and Laury (2002) and Harrison, Lau, and Williams (2002).”