Measuring Decreasing and Increasing Impatience

Many studies show that time preference data from experiments and surveys are related to field behavior. Time preference measures in these studies typically depend simultaneously on utility curvature, the level of impatience, and the change in the level of impatience. Thus, these studies do not allow one to establish which of these three components drive(s) the field behavior of interest. Of these components, the change in the level of impatience is theoretically thought to be the main driver of time inconsistencies and self-control problems. To test this theoretical presumption, one has to measure the change in the level of impatience independently from utilities and levels of impatience. This paper introduces a measure of the degree of decreasing impatience, the DI-index. It measures the change of impatience independently from the level of impatience and independently from utility. It can also be used to test various discounting models. An experiment finds no correlation between the degree of decreasing impatience and self-reported self-control problems in daily life, suggesting that changing impatience is not the sole driver of self-control problems. History: Accepted by Manel Baucells, decision analysis. Funding: Erasmus Research Institute of Management provided financial support. Supplemental Material: Data and the supplementary material are available at https://doi.org/ 10.1287/mnsc.2017.3015. Keywords: decreasing impatience * hyperbolic discounting * intertemporal choice
1. Introduction Virtually any decision we make involves future consequences. Individuals are often inconsistent when making such decisions. They tend to make plans for the future to which they do [...]