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On the Aggregate Stability of Time Preferences

Hardardottir, Hjördis LU (2016) In Working Paper / Department of Economics, School of Economics and Management, Lund University
Abstract
We look at the stability of survey based subjective time preferences over time. Using data from a Dutch panel survey spanning the period 1998 to 2012, the stability of subjective time preferences at the aggregate level and at the individual level are studied. While aggregate preferences are clearly unstable, individual subjective time preferences are relatively stable over time. In order to shed light on the observed instability in aggregated time preferences we look at the relationship between the macroeconomic situation and time preferences. We find that for the sample as a whole patience is positively correlated with economic growth, but negatively correlated with income inequality. When studying how the estimations differ across income... (More)
We look at the stability of survey based subjective time preferences over time. Using data from a Dutch panel survey spanning the period 1998 to 2012, the stability of subjective time preferences at the aggregate level and at the individual level are studied. While aggregate preferences are clearly unstable, individual subjective time preferences are relatively stable over time. In order to shed light on the observed instability in aggregated time preferences we look at the relationship between the macroeconomic situation and time preferences. We find that for the sample as a whole patience is positively correlated with economic growth, but negatively correlated with income inequality. When studying how the estimations differ across income groups we observe that there is a considerable asymmetry in how different income groups react to changes in the macroeconomic situation. (Less)
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author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
Time preferences, stability of preferences, income inequality, economic growth, determinants of preferences
in
Working Paper / Department of Economics, School of Economics and Management, Lund University
issue
5
pages
42 pages
publisher
Department of Economics, Lund Universtiy
language
English
LU publication?
yes
id
c9547be7-742a-4d96-a57b-ae60b9b4615a (old id 8841358)
alternative location
http://swopec.hhs.se/lunewp/abs/lunewp2016_005.htm
date added to LUP
2016-03-11 09:45:27
date last changed
2016-04-16 08:45:14
@misc{c9547be7-742a-4d96-a57b-ae60b9b4615a,
  abstract     = {We look at the stability of survey based subjective time preferences over time. Using data from a Dutch panel survey spanning the period 1998 to 2012, the stability of subjective time preferences at the aggregate level and at the individual level are studied. While aggregate preferences are clearly unstable, individual subjective time preferences are relatively stable over time. In order to shed light on the observed instability in aggregated time preferences we look at the relationship between the macroeconomic situation and time preferences. We find that for the sample as a whole patience is positively correlated with economic growth, but negatively correlated with income inequality. When studying how the estimations differ across income groups we observe that there is a considerable asymmetry in how different income groups react to changes in the macroeconomic situation.},
  author       = {Hardardottir, Hjördis},
  keyword      = {Time preferences,stability of preferences,income inequality,economic growth,determinants of preferences},
  language     = {eng},
  note         = {Working Paper},
  number       = {5},
  pages        = {42},
  publisher    = {Department of Economics, Lund Universtiy},
  series       = {Working Paper / Department of Economics, School of Economics and Management, Lund University},
  title        = {On the Aggregate Stability of Time Preferences},
  year         = {2016},
}