DP Number DP2019-003

Language 英語のみ

Date February, 2020

Author Wataru Kureishi, Hannah Paule-Paludkiewicz, Hitoshi Tsujiyama, MidoriWakabayashi

JEL Classification codes D01, D12, D91

Keywords Time Preferences;Preference Stability;Age;Discount Rates

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Abstract

We study whether and how time preferences change over the life cycle, exploiting representative long-term panel data. We estimate the age patterns of discount rates from age 25 to 80. In order to identify age effects, we have to disentangle them from cohort and period factors. We address this identification problem by estimating individual fixed effects models, where we substitute period effects with determinants of time preferences that depend on calendar years. We find that discount rates decrease with age and the decline is remarkably linear over the life cycle.