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A direct test of hyperbolic discounting using market asset data

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  • Salois, Matthew J.
  • Moss, Charles B.

Abstract

This paper introduces a framework that generalizes exponential discounting in a net present value model by including a quasi-hyperbolic discount parameter in the asset valuation equation. Using observed market asset data, a statistically significant quasi-hyperbolic parameter is obtained, thus rejecting exponential discounting.

Suggested Citation

  • Salois, Matthew J. & Moss, Charles B., 2011. "A direct test of hyperbolic discounting using market asset data," Economics Letters, Elsevier, vol. 112(3), pages 290-292, September.
    • Handle: RePEc:eee:ecolet:v:112:y:2011:i:3:p:290-292
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    References listed on IDEAS

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