The Joint Identification of Utility and Discount Functions from Stated Choice Data: An Application to Durable Goods Adoption

To Know and to Care: How Awareness and Valuation of the Future Jointly Shape Consumer Spending

“…More recently, research that tries to estimate discount factors from dynamic behavior has treated consumers as fully forward-looking either by assumption (Yao et al 2012) or by experimentally providing full information (Dube, Hitsch, and Jindal 2014). Our findings imply that time preference and planning horizon are not equivalent, and they highlight the importance of qualifying the interpretation of models that make strong assumptions about either factor.…”

Platform adoption in system markets: The roles of preference heterogeneity and consumer expectations

“…Instead, consumer choices are interpreted as the result of their expectations about the future system value (Dubé et al, 2010). In a similar vein, Dubé, Hitsch, and Jindal (2013) provide decision makers with expert predictions about future system prices and assume that this information enables respondents to make adoption decisions "with perfect foresight" (p.2). Therefore, they do not survey customer expectations, but assess the tradeoff between buying now or in the future.…”

Identification and Estimation of Forward-Looking Behavior: The Case of Consumer Stockpiling

“…In the context of cell phone usage, Yao, Mela, Chiang, and Chen (2012) find that the weekly discount factor is 0.91, and in one of their robustness exercises they find that the population distribution of discount factors has a standard deviation of 0.26. For Blu-Ray player purchases, Dubé, Hitsch, and Jindal (2014) find average annual discount factors of about 0.4 (which is around 0.97 after converting to a weekly discount factor), and a significant amount of heterogeneity across individuals. Moreover, Yang and Ching (2014) document (in their Appendix B) that Italian consumers' annual discount factors range from 0.8 to 1 when considering intertemporal trade-offs of one's annual income.…”

“…For example, Seiler (2013) uses a value of 0.998. be context specific. Moreover, in stated choice experiments performed by Dubé, Hitsch, and Jindal (2014), consumers appear to be much less forward-looking than what economic theory implies, with average annual discount rates of 0.43. Dubé, Hitsch, and Jindal (2014) and Yang and Ching (2014) also find substantial heterogeneity in discount factors across individuals.…”