TY  - JOUR
AU  - Viscusi,W. Kip
AU  - Huber,Joel
TI  - Hyperbolic Discounting of Public Goods
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11935
PY  - 2006
Y2  - January 2006
UR  - http://www.nber.org/papers/w11935
L1  - http://www.nber.org/papers/w11935.pdf
N1  - Author contact info:
W. Kip Viscusi
Vanderbilt Law School
131 21st Avenue South
Nashville, TN 37203-1181
Tel: 615/343-7715
E-Mail: kip.viscusi@vanderbilt.edu

Joel Huber
Fuqua School of Business
Duke University
Durham, NC 27706
E-Mail: Joel.Huber@Duke.edu
AB  - This article examines revealed rates of time preference for public goods, using environmental quality as the case study. A nationally representative panel-based sample of 2,914 respondents considered a series of 5 conjoint policy choices, yielding 14,570 decisions. Both the conditional fixed effect logit estimates of the random utility model and mixed logit estimates implied that the rate of time preference is very high for immediate improvements and drops off substantially thereafter, which is inconsistent with exponential discounting but consistent with hyperbolic discounting. The implied marginal rate of time preference declines and then rises. Estimates of the quasi-hyperbolic discounting parameter range from 0.48 to 0.61. People who are older are especially likely to have a high disutility from delays in improving water quality.
ER  -