TY  - RPRT
        AU  - Gautier, Pieter A.
AU  - Vuuren, Aico van
        TI  - A Flexible Test for Present Bias and Time Preferences Using Land-Lease Contracts
        PY  - 2011/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5821
        UR  - https://www.iza.org/index.php/publications/dp5821
        AB  - When agents have present bias, they discount more between now and the next period than between period t (> 1) and t + 1. How fast the future discount rate (evaluated today) decays is an empirical question. We show that the discount function can be non-parametrically identified with contracts that specify payments that take place at various points in time in the future and which are traded and priced in a competitive market. We use a unique land lease-contract data set for Amsterdam, which has the above properties, to test for present bias in a flexible way. We find no evidence for present bias in this market. Even though we allow for a general-hyperbolic specification (which has exponential discounting as a special case), our estimates converge to an exponential discount function with a corresponding discount rate (in our baseline specification) of 8 %.
        KW  - present bias
KW  - hyperbolic discounting
KW  - discount rate
KW  - hedonic estimation
        ER  -