Hyperbolic Discounting and Consumer Patience: The Case of Korea

ABSTRACT

In this article, we test whether the consumption pattern in Korea exhibits a time-inconsistent discounting behavior compared to the conventional exponential discounting. We derive the quasi-hyperbolic Euler equation and estimate it using the generalized method of moments (GMM). The estimation results show that Korean consumers exhibit a time-inconsistent quasi-hyperbolic discounting behavior in general, but the pattern of inconsistency in consumption behavior, in particular the degree of impatience, depends on the estimation period, in particular whether it includes financial crisis periods in 1997–98 and 2008–11.     

做到“三心”提高班主任工作水平

作为一个班主任我认为应该做到以下"三心"。一、班主任的责任心是做好班级工作的首要前提二、班主任的爱心是做好班级工作的感情基础三、班主任的耐心是做好班级工作的基本素质     

Time preference and savings behaviour

A number of studies have examined various determinants of savings rate. This article contributes to this literature by empirically testing whether the time preference (discounting behaviour) is another important determinant of savings rate. To this end, we estimate the hyperbolic Euler equation using the generalized method of moments (GMM) to examine whether the short-run discount factor can account for savings behaviour. The empirical results show that people exhibit short-run patience (impatience) when savings rate increases (decreases), which is in line with the theoretical prediction. This result implies that the time preference also plays an important role in determining savings behaviour. Various sets of instruments and different sample periods do not reverse the main finding.     

How does the ordering of questions affect elicited time preferences?

Since time preferences constitute a concept fundamental to economics, many economists have attempted to elicit time preferences by using multiple price lists. In such endeavours, however, little attention has been paid to the effect of the ordering of questions on elicited time preferences although the ordering effect is well known. We analysed a representative sample of the Indonesian population (13,870 men and 15,858 women) by applying censored maximum likelihood regressions. We exploited the randomized ordering of two series of delay questions (1- and 5-year delays) and estimated the causal effect of the ordering on elicited time preferences. Respondents who considered the longer-delay questions exhibited more patience, and the effects were larger for women. Economists need to take into account the ordering effect as they design experiments by which to elicit time and other preferences.