Search results

This article aims to investigate the role of socioeconomic factors and individual time preferences in the demand for fast-food in Russia. An individual discount rate shows the ability of a person to postpone utility from consumption to future periods.

An individual discount rate is measured through a hypothetical money experiment. The database is the special survey of the Levada analytical center conducted in 2017. Multivariate probit model enables the authors to consider the possible endogeneity of individual discount rate and reveal the relationship between socioeconomic factors and frequent fast-food consumption.

Results show that a higher individual discount rate is related to frequent consumption of fast-food. At the same time, there are factors that provoke both a higher individual discount rate and the refusal of frequent consumption of fast-food. Findings advise the prioritization of measures highlighting the short-term benefits of healthy eating and the short-term costs of avoiding it.

To the authors' knowledge, this article is the first one which presents comprehensive investigation of microeconomic factors of fast-food consumption in Russia including individual time preferences of consumers.

One of the fundamental tasks in optimal insurance design is mitigating the moral hazard effects inherent in insurance mechanisms. Empirically, relatively little is known about how individual-level time preferences affect selection of insurance options. We use several waves of the Health and Retirement Survey to explore the relationship between revealed time preferences at the individual level and the selection of insurance options for both the under-age-65 population and the Medicare-eligible population. Our results suggest that time preferences are not likely to be fixed across the life cycle, and that they appear to be important predictors of health insurance decisions.

Positive-framed and negative-framed messages were delivered to examine the effect of framing on intertemporal decisions through lab experiments while holding the level of financial literacy constant. The three big questions adopted by Lusardi and Mitchell were utilized to assess the financial literacy of our subjects before they were asked to complete 20 incentivized intertemporal decisions. A small, delayed reward and a slightly bigger one were incorporated into the intertemporal decisions with a delay of 30 days. The ordinary least square (OLS) shows that the negative relationship between financial literacy and discount rates was held when the delayed reward was small. Interestingly, when the delayed reward became slightly bigger, their discount rates were reduced significantly with the negatively framed message. These findings suggest that the negatively framed message can motivate individuals to save for a greater return in the real world. Lastly, subjects with the highest level of financial literacy were not responsive to the magnitude effect, proving that a financial literacy program is essential to strengthen the individual's financial plan and reduce their discount rates in the developing country context.

We explore the predictive capacity of short-horizon time preference decisions for long-horizon investment decisions. We use experimental evidence from a sample of Canadian working poor. Each subject made a set of decisions trading off present and future amounts of money. Decisions involved both short and long time horizons, with stakes ranging up to 600 dollars. Short horizon preference decisions do well in predicting the long-horizon investment decisions. These short horizon questions are much less expensive to administer but yield much higher estimated discount rates. We find no evidence that the present-biased preference measures generated from the short-horizon time preference decisions indicate any bias in long-term investment decisions. We also show that individuals are heterogeneous with respect to discount rates generated by short-horizon time preference decisions and long-horizon time preference decisions.

If we are to examine the role of “controls” in different experimental settings, it is appropriate that the word be defined carefully. The Oxford English Dictionary (Second Edition) defines the verb “control” in the following manner: “To exercise restraint or direction upon the free action of; to hold sway over, exercise power or authority over; to dominate, command.” So the word means something more active and interventionist than is suggested by it’s colloquial clinical usage. Control can include such mundane things as ensuring sterile equipment in a chemistry lab, to restrain the free flow of germs and unwanted particles that might contaminate some test.

We design experiments to jointly elicit risk and time preferences for the adult Danish population. The experimental procedures build on laboratory experiments that have used traditional subject pools. The field experiments utilize field sampling designs that we developed, and procedures that were chosen to be relatively transparent in the field with non-standard subject pools. Our overall design was also intended to be a general template for such field experiments in other countries. We examine the characterization of risk over a wider domain for each subject than previous experiments, allowing more precise estimates of risk attitudes. We also examine individual discount rates over six time horizons, as the first stage in a panel experiment in which we revisit subjects to test consistency and stability of responses over time. Risk and time preferences are heterogeneous, varying by observable individual characteristics. On a methodological level, we implement a refinement of existing procedures which elicits much more precise estimates, and also mitigates framing effects.

Daily COVID-19-related morbidity and mortality rates are still high globally, and masking is considered a reliable method of preventing its infections. Yet, the rate of voluntary compliance with masking remains very low in most parts of the world, especially in developing countries. The authors hypothesize that the decision to wear a mask entails some benefit-cost analysis that involves time discounting. In addition, the authors surmise that feel-good benefits from pro-social behavior and from wearing fashionable masks are substantial.

The study is based on a survey of 900 fishermen and fish traders in Ghana. A simple experiment was designed to elicit individual rates of time preference. In addition, the fishers were asked questions about their political affiliation and knowledge of the COVID-19 pandemic, among others. A logit model is used to investigate the determinants of the decision to wear a mask.

The authors found that masking compliance increases in time discounting for fishmongers, suggesting that private benefits from pro-social behavior or feel-good benefits from wearing a mask are very strong. In addition, those who belonged to the ruling political party were more likely to wear a mask. Other factors increasing the likelihood of masking include affiliation with the ruling political party, knowledge of COVID-19 and knowledge of someone who lost his/her job due to COVID-19.

To the best of the authors’ knowledge, this is the first study to investigate the effect of time discounting on the voluntary compliance of a health safety measure, which could provide a direct utility. In addition, the study explores the effect of political affiliation on voluntary masking behavior.

The purpose of this paper is to examine what the significant contributions to the intergenerational equity and social discount rate (SDR) literature have been over recent decades and presents what policy progress has been made as a result.

The approach has been that of a literature survey.

The paper observes that only when academics agree, however, they can influence policy, as one major policy change for SDR demonstrates.

Further research can analyse the application of SDRs in other jurisdictions.

A formal process of demonstrating academic consensus and its application to policy is recommended.

SDRs are extremely important for government decision making. Spreading knowledge about how SDRs are created and used is therefore of great social importance.

This paper could usefully be read by government officials, as well as academics, worldwide. It is a contribution to knowledge not just in its subject matter but also in analysing the frontier between academic knowledge and progress on the one hand, and government decision making on the other.

We argue that managers’ choice to manage earnings depends on the trade-off in the present value of expected future net benefits associated with that choice. Specifically, we examine if discount rates are associated with the likelihood that managers engage in earnings management to meet or beat various earnings targets. We find that discount rates are positively associated with income-increasing earnings management. This means that managers increase both accrual-based and real earnings management when discount rates are higher. However, the economic magnitude of this association is relatively moderate.

The use of behavioral insights and experimental methods has recently gained momentum among health policy-makers. There is a tendency, however, to reduce behavioral insights applications in health to “nudges,” and to reduce experiments in health to “randomized controlled trials” (RCTs). We argue that there is much more to behavioral insights and experimental methods in health economics than just nudges and RCTs. First, there is a broad and rich array of complementary experimental methods spanning the lab to the field, and all of them could prove useful in health economics. Second, there are a host of challenges in health economics, policy, and management where the application of behavioral insights and experimental methods is timely and highly promising. We illustrate this point by describing applications of experimental methods and behavioral insights to one specific topic of fundamental relevance for health research and policy: the experimental elicitation and econometric estimation of risk and time preferences. We start by reviewing the main methods of measuring risk and time preferences in health. We then focus on the “behavioral econometrics” approach to jointly elicit and estimate risk and time preferences, and we illustrate its state-of-the-art applications to health.