Eliciting Subjective Discount Rates: Monthly Patterns of Impatience Among the Very Poor

Erin Krupka, Institute for the Study of Labor (IZA), Germany
Using data from the Seattle Income Maintenance Experiment, I exploit variation in the interview date of the “Time Horizon and Planning” module, which is orthogonal to the welfare benefit disbursement date, to demonstrate a ‘daily discount rate’ that is increasing over the course of the benefit month while controlling for socio-economic variables. I find this pattern to be robust to different discount rate measures. I explore the hypothesis that the daily increase in impatience can be explained when controlling for perceive credit constraints or for exogenous variation in benefit levels but am able to rule these explanations out.
[ to cite ]:
Erin Krupka (2009) ,"Eliciting Subjective Discount Rates: Monthly Patterns of Impatience Among the Very Poor", in NA - Advances in Consumer Research Volume 36, eds. Ann L. McGill and Sharon Shavitt, Duluth, MN : Association for Consumer Research, Pages: 139-142.