10 September 2020

The paper "Nonparametric Analysis of Time-Inconsistent Preferences"

by Martin Browning and Co-authors has been accepted for publication in The Review of Economic Studies.


This paper provides a revealed preference characterisation of quasi-hyperbolic discounting which is designed to be applied to readily-available expenditure surveys. We describe neccessary and sufficient conditions for leading forms of the model and also study the consequences of the restrictions on preferences popularly used in empirical lifecycle cinsumption models.

Using data from a household consumption panel dataset we explore the prevalence of time-inconsistent behaviour.

This quasi-hyperbolic model provides a significantly more successful account of behaviour than the alternatives considered. We estimate the joint distribution of time preferences and the distribution of discount functions at various time horizons.

You can read the full paper here