Arbeitspapier

Internal and External Validity of Experimental Risk and Time Preferences

to related objects

Using a unique field experiment from Canada, we estimate individual preference over risk and time and show considerable heterogeneity in both dimensions and relatively stable distributions across our various specifications, which include hyperbolic, quasi-hyperbolic discounting as well as subjective failure probability over future payments. We investigate the predictive power (transportability) of the estimated preference parameters when used to explain the take-up decision of higher education grants where financial stakes are approximately seven to fifty times larger than the cash transfers used to elicit preferences. We find that both long-run discount factors and subjective payment failure risk parameters have a high degree of transportability across tasks, while parameters characterizing short-run discount preferences are irrelevant when considering higher-stakes decisions.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 10348

Classification
Wirtschaft
Design of Experiments: Laboratory, Individual
Consumer Economics: Empirical Analysis
Criteria for Decision-Making under Risk and Uncertainty
Subject
discounting
risk aversion
time inconsistency
transportability

Event
Geistige Schöpfung
(who)
Belzil, Christian
Sidibé, Modibo
Event
Veröffentlichung
(who)
Institute for the Study of Labor (IZA)
(where)
Bonn
(when)
2016

Handle
Last update
10.03.2025, 11:43 AM CET

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Object type

  • Arbeitspapier

Associated

  • Belzil, Christian
  • Sidibé, Modibo
  • Institute for the Study of Labor (IZA)

Time of origin

  • 2016

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