TY - JOUR
T1 - Time discounting and wealth inequality
AU - Epper, Thomas
AU - Fehr, Ernst
AU - Fehr-Duda, Helga
AU - Kreiner, Claus Thustrup
AU - Lassen, David Dreyer
AU - Leth-Petersen, Søren
AU - Rasmussen, Gregers Nytoft
PY - 2020/4
Y1 - 2020/4
N2 - This paper documents a large association between individuals’ time discounting in incentivized experiments and their positions in the real-life wealth distribution derived from Danish high-quality administrative data for a large sample of middle-aged individuals. The association is stable over time, exists through the wealth distribution and remains large after controlling for education, income profile, school grades, initial wealth, parental wealth, credit constraints, demographics, risk preferences, and additional behavioral parameters. Our results suggest that savings behavior is a driver of the observed association between patience and wealth inequality as predicted by standard savings theory.
AB - This paper documents a large association between individuals’ time discounting in incentivized experiments and their positions in the real-life wealth distribution derived from Danish high-quality administrative data for a large sample of middle-aged individuals. The association is stable over time, exists through the wealth distribution and remains large after controlling for education, income profile, school grades, initial wealth, parental wealth, credit constraints, demographics, risk preferences, and additional behavioral parameters. Our results suggest that savings behavior is a driver of the observed association between patience and wealth inequality as predicted by standard savings theory.
U2 - 10.1257/aer.20181096
DO - 10.1257/aer.20181096
M3 - Journal article
AN - SCOPUS:85085296640
VL - 110
SP - 177
EP - 1205
JO - American Economic Review
JF - American Economic Review
SN - 0002-8282
IS - 4
ER -