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2008-04-08 | EfD Discussion Paper

Do Discount Rates Change over Time? Experimental Evidence from Ethiopia

Yesuf, Mahmud and Heather Klemick. 2008. “Do Discount Rates Change over Time? Experimental Evidence from Ethiopia.” EfD Discussion Paper 08.
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This artefactual experiment in Ethiopia tested the hyperbolic discounting hypothesis by comparing time discounting over cash and consumption goods, using real payoffs. It found no difference in elicited time preferences between cash and consumption goods (tradable or final), which could be the result of missing markets in rural Ethiopia, and there was some evidence of time-inconsistent preferences.