Procedures for Eliciting Time Preferences

Freeman, David; Manzini, Paola; Mariotti, Marco; Mittone, Luigi

doi:10.2139/ssrn.2757967

Cited by 5 publications

(4 citation statements)

References 24 publications

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“…Respondents were asked to click on the radio button that indicated which option they would choose and how confident they felt that this was the better option for them This method is most like the way in which values are usually elicited, although it tries to emphasise equivalence and makes the analogous choice implications explicit, whereas some direct formats couch the exercise in terms of the maximum amount respondents would be willing to pay to acquire an option or else in terms of the minimum amount they would be prepared to accept in exchange for selling the option. For example, Freeman et al (2016) used two types of direct valuation procedure (one linked to the Becker et al (1964) incentive mechanism, the other involving a second-price auction) which asked respondents to state the lowest sum they would prefer to receive tomorrow instead of receiving €20 at a later date. Likewise, TSK asked participants to state, hypothetically, "the smallest immediate cash payment for which they would be willing to exchange the delayed payment" (p.231).…”

Section: Direct Valuation (Dv)mentioning

confidence: 99%

Revisiting the diagnosis of intertemporal preference reversals

Loomes

2022

J Risk Uncertain

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Intertemporal preference reversals occur when individuals choose future option A over future option B in a direct choice between the two but place a higher ‘immediate cash’ value on B than on A. Tversky et al. (1990) reported strong evidence of such reversals, which they attributed mainly to valuation biases rather than intransitivity. We find similar levels of reversals, even after adjusting for considerable degrees of variability and imprecision in people’s responses. However, we disagree with Tversky et al.’s conclusions about the causes of the majority of these reversals. We find substantial levels of intransitivity in respondents’ binary choices as well as differential overvaluation of both options relative to the values inferred from their choices.

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Section: Direct Valuation (Dv)mentioning

confidence: 99%

Revisiting the diagnosis of intertemporal preference reversals

Loomes

2022

J Risk Uncertain

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“…In order to estimate consistent time preferences, intertemporal choices must follow the monetary monotonicity property, which requires that subjects prefer more money to less given a fixed time horizon (Freeman et al, 2016). We, therefore, excluded inconsistent responses, where participants were willing to wait for a certain amount, but not willing to wait for a higher gain.…”

Section: Conceptual Framework: Outcomes Of Interest and Hypothesesmentioning

confidence: 99%

Cash transfers and women's economic inclusion

2022

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This paper investigates whether an increase in exogenous income through the Child Grants model of the Social Cash Transfer programme in Zambia fosters economic inclusion among rural women. We conceptualize economic inclusion as a transformative process comprised of four pillars: productive capacity, financial inclusion, social power, and psychological assets. Using experimental data, we find strong evidence of direct impacts of the Child Grant on the productive capacity, financial inclusion, and psychological assets of rural women. In addition to these direct impacts, we implement a mediation analysis to explore the potential mediating role of psychological assets in affecting the other pillars of economic inclusion. Through this approach, we find indicative evidence of indirect and mutually reinforcing relationships between changes in psychological assets brought about through the Child Grant and improvements in the productive capacity and financial inclusion of beneficiaries. Such results suggest that cash transfers might be effective in promoting women's economic inclusion, both through the direct monetary effect and through the mediated effect of psychological assets.

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“…However, most of the evidence demonstrates that the choosing and matching methods yield inconsistent discount rates (Hardisty, Thompson, et al, 2013;Cohen et al, 2020). Specifically, a lower discount rate is found via matching methods than via choosing methods (Read & Roelofsma, 2003;Freeman et al, 2016). Furthermore, discount rates from monetary gains are higher than those from losses (Thaler, 1981), known as "gain-loss asymmetry" or the "sign effect."…”

Section: Tasks and Discount Ratesmentioning

confidence: 99%

Comparing mixed intertemporal tradeoffs with pure gains or pure losses

Wang

Chen

et al. 2021

Judgm. decis. mak.

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Intertemporal choices involve tradeoffs between outcomes that occur at different times. Most of the research has used pure gains tasks and the discount rates yielding from those tasks to explain and predict real-world behaviors and consequences. However, real decisions are often more complex and involve mixed outcomes (e.g., sooner-gain and later-loss or sooner-loss and later-gain). No study has used mixed gain-loss intertemporal tradeoff tasks to explain and predict real-world behaviors and consequences, and studies involving such tasks are also scarce. Considering that tasks involving a combination of gains and losses may yield different discount rates and that existing pure gains tasks do not explain or predict real-world outcomes well, this study conducted two experiments to compare the discount rates of mixed gain-loss intertemporal tradeoffs with those of pure gains or pure losses (Experiment 1) and to examine whether these tasks predicted different real-world behaviors and consequences (Experiment 2). Experiment 1 suggests that the discount rate ordering of the four tasks was, from highest to lowest, pure gains, sooner-loss and later-gain, pure losses, and sooner-gain and later-loss. Experiment 2 indicates that the evidence supporting the claim that the discount rates of the four tasks were related to different real-world behaviors and consequences was insufficient.

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Procedures for Eliciting Time Preferences

Cited by 5 publications

References 24 publications

Revisiting the diagnosis of intertemporal preference reversals

Revisiting the diagnosis of intertemporal preference reversals

Cash transfers and women's economic inclusion

Comparing mixed intertemporal tradeoffs with pure gains or pure losses

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