Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 569: Intertemporal Choice Shifts in Households: Do they occur and are they good?

Fredrik Carlsson (fredrik.carlsson@economics.gu.se) and Xiaojun Yang (xiaojun.yang@economics.gu.se)
Additional contact information
Fredrik Carlsson: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG, Sweden
Xiaojun Yang: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG, Sweden

Abstract: We examine whether and to what extent joint choices are more or less patient and time-consistent than individual choices in households. We use data from an artefactual field experiment where both individual and joint time preferences were elicited. We find a substantial shift from individual to joint household decisions. Interestingly, joint decisions do not only generate beneficial shifts, i.e., patient and time-consistent shifts. On the contrary, a majority of the observed shifts are impatient and time-inconsistent shifts. A number of observable characteristics are significantly correlated with these shifts in preferences from individual decisions to joint decisions.

Keywords: individual decisions; joint decisions; patience; time-consistency; choice shifts; rural China

JEL-codes: C91; C92; C93; D10

28 pages, July 31, 2013

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