Document Type
Working Paper
Date of this Version
1-13-2023
Abstract
This research project evaluates the extent of heterogeneity in time discounting among elderly Americans, as well as its role in explaining older peoples’ key behaviors. We first show how older Americans evaluate simple (hypothetical) intertemporal choices in which payments now are compared with payments in the future. This adds to the literature on time horizon experiments by focusing on a nationally representative sample of persons age 70+. Using the indicators derived from this experiment, we show how differences in discounting patterns are associated with characteristics of particular importance in elderly populations, such as serious health and mental conditions. We then relate our discounting measure to key outcome variables including wealth, the timing of retirement, investments in health, and decisions about end of life care.
Keywords
impatience; time preference; self-control; retirement; health; insurance
JEL Code
D01, D03, D12, D14, D90, E21, G11, I12, I13, J26
Working Paper Number
WP2016-05
Disclosure
Mitchell is a Trustee of the Wells Fargo Advantage Funds and has received research support from TIAA.
Copyright/Permission Statement
The opinions and conclusions expressed herein are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the Federal Government, or any other institution with which the authors are affiliated. © 2016 Huffman, Maurer, and Mitchell. All rights reserved.
Acknowledgements
The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Michigan Retirement Research Center. The authors also acknowledge support from the Pension Research Council/Boettner Center at the Wharton School of the University of Pennsylvania. They have also benefited from expert programming assistance of Yong Yu.
Date Posted: 05 March 2019
Comments
Published in The Journal of the Economics of Ageing Vol 14, 2019, 100121
https://doi.org/10.1016/j.jeoa.2017.05.001