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Did households’ time preference change due to the Great Recession?

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  • Eunice O. Hong
  • Sherman D. Hanna

Abstract

Household time preference for US households, as measured by the planning horizon, was fairly stable for many years, but sharply changed with the onset of the Great Recession. Based on an analysis of a combination of the 1992–2013 Survey of Consumer Finances (SCF) datasets, time preference increased in 2010 and remained high in 2013, indicating households were less patient after the onset of the recession. This pattern held up even after controlling for household characteristics.

Suggested Citation

  • Eunice O. Hong & Sherman D. Hanna, 2016. "Did households’ time preference change due to the Great Recession?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(15), pages 1047-1050, October.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:15:p:1047-1050
    DOI: 10.1080/13504851.2015.1133887
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    References listed on IDEAS

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    1. Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 729-758.
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    4. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    5. Sherman D. Hanna & KyoungTae Kim, 2014. "Time preference assumptions in normative analyses of household financial decisions," Applied Economics Letters, Taylor & Francis Journals, vol. 21(9), pages 609-612, June.
    6. Paul A. Samuelson, 1937. "A Note on Measurement of Utility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 4(2), pages 155-161.
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    Cited by:

    1. Kyoung Tae Kim & Soo Hyun Cho & Sharon A. DeVaney, 2021. "Racial/ethnic differences in holding a retirement saving motive: A decomposition analysis," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(2), pages 464-482, June.

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