SAVING DECISIONS OF THE WORKING POOR: SHORT- AND LONG-TERM HORIZONS Chapter

abstract

• 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. 2005.

authors

• Eckel, Catherine

author list (cited authors)

• Eckel, C., Johnson, C., & Montmarquette, C.

citation count

• 72

complete list of authors

• Eckel, Catherine||Johnson, Cathleen||Montmarquette, Claude

Book Title

• Field Experiments in Economics

publication date

• May 2005

publisher

• Emerald  Publisher

published in

• Research in Experimental Economics  Journal

Digital Object Identifier (DOI)

• 10.1016/s0193-2306(04)10006-9

International Standard Book Number (ISBN) 10

• 0762311746

International Standard Book Number (ISBN) 13

• 9780762311743

start page

• 219

end page

• 260

volume

• 10

URL

• http%3A%2F%2Fdx.doi.org%2F10.1016%2Fs0193-2306%2804%2910006-9