Simultaneous Measurement of Time and Risk Preferences: Stated Preference Discrete Choice Modeling Analysis Depending on Smoking Behavior

Measuring time and risk preferences and relating them to economic behaviors are important topics in behavioral economics. We developed a new method to simultaneously measure the rate of time preference and the coefficient of risk aversion. Analyzing the individual-level relationships between prefere...

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Bibliographic Details
Published inInternational economic review (Philadelphia) Vol. 50; no. 4; pp. 1169 - 1182
Main Authors Ida, Takanori, Goto, Rei
Format Journal Article
LanguageEnglish
Published Malden, USA Wiley Periodicals on behalf of the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association 01.11.2009
Blackwell Publishing Inc
Blackwell Publishing Ltd
Subjects
Cigarette smoking
Discounting
Economic choice
Economic models
Human behaviour
Nicotine dependence
Preferences
Risk
Risk assessment
Risk aversion
Risk aversion preference
Risk preferences
Smoking
Smoking cessation
Studies
Time
Tobacco smoking
Utility models
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Summary:Measuring time and risk preferences and relating them to economic behaviors are important topics in behavioral economics. We developed a new method to simultaneously measure the rate of time preference and the coefficient of risk aversion. Analyzing the individual-level relationships between preference parameters and cigarette smoking, we conclude that current smokers are more impatient and risk-prone than nonsmokers. Heavy smokers are the most impatient and risk-prone, whereas ex-smokers are the most patient and risk-averse. Among nonsmokers, neither age-related nor gender-related differences were found. On the other hand, risk and time preferences are significantly different according to age and gender for smokers.
Bibliography:This research was partially funded by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Grant in Aid for 21st Century COE Program ‘‘Interfaces for Advanced Economic Analysis.” We are thankful for helpful comments by Atsushi Kajii, Aki Tsuchiya, Dan Sasaki, Naoki Watanabe, Makoto Hanazono, Takahiro Tsuge, the managing editor, and the three anonymous referees. Please address correspondence to: Takanori Ida, Graduate School of Economics, Kyoto University, Yoshida, Sakyoku, Kyoto 606‐8501, Japan. Phone: 81‐75‐753‐3477. E‐mail
ida@econ.kyoto‐u.ac.jp
Manuscript received November 2006; revised July 2007.
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ISSN:0020-6598
1468-2354
DOI:10.1111/j.1468-2354.2009.00564.x