Do Discount Rates Change over Time? Experimental Evidence from Ethiopia

EfD Discussion Paper
1 January 2008

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.

 

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Publication | 8 April 2008