Time preference and its relationship with age, health, and survival probability

• Type: Article in International Scientific Journal
• Date: 2009

Authors

Chao, LW (Author) Other; Szrek, H (Author) FEP; Nuno Sousa Pereira (Author) FEP; Pauly, MV (Author) Other

Journal

Title: Judgment and Decision Making

Vol. 4

Pages: 1-19

ISSN: 1930-2975

Publisher: Society for Judgment and Decision Making

Indexing

ISI Web of Knowledge - 84 Citations

Scopus - 89 Citations

Other information

Authenticus ID: P-003-NK4

Abstract (EN): Although theories from economics and evolutionary biology predict that one's age, health, and survival probability should be associated with one's subjective discount rate (SDR), few studies have empirically tested for these links. Our study analyzes in detail how the SDR is related to age, health, and survival probability, by surveying a sample of individuals in townships around Durban, South Africa. In contrast to previous studies, we find that age is not significantly related to the SDR, but both physical health and survival expectations have a U-shaped relationship with the SDR. Individuals in very poor health have high discount rates, and those in very good health also have high discount rates. Similarly, those with expected survival probability on the extremes have high discount rates. Therefore, health and survival probability, and not age, seem to be predictors of one's SDR in an area of the world with high morbidity and mortality.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 19