Behavioral Workshop - Jeremy Tobacman - CANCELLED
Tue, 03/14/2017 - 11:40am
University of Pennsylvania
401 Plant Science Building (PSB)
Intertemporal preferences are difficult to measure because financial payments (e.g., checks in the mail) are not equivalent to consumption flows. We estimate time preferences using a structural buffer stock consumption model and the Method of Simulated Moments. The model includes stochastic labor income, liquidity constraints, child and adult dependents, liquid and illiquid assets, revolving credit, retirement, and discount functions that allow short-run and long-run discount rates to differ. Data on wealth accumulation and credit card borrowing over the lifecycle identify the parameters in the model. In almost all specifications we reject the restriction to a constant discount factor (i.e., exponential discounting). Our benchmark estimates imply a short-term discount factor of 0.504 and a long-term annualized discount factor of 0.987.
Event Categories: Behavioral Economics & BEDR