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Nonparametric Analysis of Time-Inconsistent Preferences

Blow, Laura, Browning, Martin and Crawford, Ian (2020) Nonparametric Analysis of Time-Inconsistent Preferences Review of Economic Studies.

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This paper provides a revealed preference characterisation of quasi-hyperbolic discounting which is designed to be applied to readily-available expenditure surveys. We describe necessary and sufficient conditions for the leading forms of the model and also study the consequences of the restrictions on preferences popularly used in empirical lifecycle consumption models. Using data from a household consumption panel dataset we explore the prevalence of time-inconsistent behaviour. The quasi-hyperbolic model provides a significantly more successful account of behaviour than the alternatives considered. We estimate the joint distribution of time preferences and the distribution of discount functions at various time horizons.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > School of Economics
Authors :
Browning, Martin
Crawford, Ian
Date : 12 June 2020
Uncontrolled Keywords : Quasi-hyperbolic discounting; Revealed preference
Depositing User : James Marshall
Date Deposited : 15 Jun 2020 10:22
Last Modified : 15 Jun 2020 10:29

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