WP 2011-14 Can Intertemporal Choice Experiments Elicit Time Preferences for Consumption? Yes

AUTHORS: Glenn W. Harrison and J. Todd Swarthout

ABSTRACT. The most popular experimental method for eliciting time preferences involves subjects making choices over smaller, sooner amounts of money and larger, later amounts of money. Under some theoretically possible configurations of preferences and procedures, the discount rates inferred from these choices could lead to misleading inferences about time preferences for consumption. Using a direct empirical test, we show that those configurations of preferences are empirically implausible.