Code for: Time Discounting and Wealth Inequality

Principal Investigator(s): View help for Principal Investigator(s) Thomas Epper, University of St.Gallen, School of Economics and Political Science; University of Zurich, Department of Economics; Center for Economic Behavior and Inequality (CEBI), Department of Economics, University of Copenhagen; Ernst Fehr, University of Zurich, Department of Economics; Center for Economic Behavior and Inequality (CEBI), Department of Economics, University of Copenhagen; Helga Fehr-Duda, University of Zurich, Department of Banking and Finance; Center for Economic Behavior and Inequality (CEBI), Department of Economics, University of Copenhagen; Claus Thustrup Kreiner, Center for Economic Behavior and Inequality (CEBI), Department of Economics, University of Copenhagen; David Dreyer Lassen, Center for Economic Behavior and Inequality (CEBI), Department of Economics, University of Copenhagen; Søren Leth-Petersen, Center for Economic Behavior and Inequality (CEBI), Department of Economics, University of Copenhagen; Gregers Nytoft Rasmussen, Center for Economic Behavior and Inequality (CEBI), Department of Economics, University of Copenhagen

Version: View help for Version V1

Name	File Type	Size	Last Modified
17_AndreoniSprenger2012_comparison			10/31/2019 09:08:AM
2_Structural_estimation_of_discount_rates			10/31/2019 09:07:AM
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Register_data_2018			10/31/2019 09:06:AM
0_Extract_register_data.sas	application/x-sas	1.6 KB	10/31/2019 05:00:AM
0_Extract_register_data_2018.sas	application/x-sas	1.5 KB	10/31/2019 05:00:AM
10_Parents_of_subjects.do	text/x-stata-syntax	8.6 KB	10/31/2019 05:00:AM

Project Citation:

Epper, Thomas, Fehr, Ernst, Fehr-Duda, Helga, Kreiner, Claus Thustrup, Lassen, David Dreyer, Leth-Petersen, Søren, and Rasmussen, Gregers Nytoft. Code for: Time Discounting and Wealth Inequality. Nashville, TN: American Economic Association [publisher], 2020. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2020-03-23. https://doi.org/10.3886/E115221V1

Project Description

Summary:

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.

Funding Sources: European Research Council (295642, 313673); Danish National Research Foundation (134); Candys Foundation

Scope of Project

Subject Terms: Wealth inequality; savings behavior; time discounting; experimental methods; administrative data

JEL Classification:
      C91 Design of Experiments: Laboratory, Individual
      D15 Intertemporal Household Choice; Life Cycle Models and Saving
      D31 Personal Income, Wealth, and Their Distributions
      E21 Macroeconomics: Consumption; Saving; Wealth

Data Type(s): program source code

Methodology

Response Rate: A total of 27,613 individuals received a personal invitation letter in hard copy from the University of Copenhagen. The analysis includes the 3,620 of the invitees, who successfully completed the experiment on the experimental platform and received a payment (13 percent of all invitees).

Sampling: Respondents were recruited by sampling individuals from the Danish population register satisfying the criteria that they were born in the period 1973-1983 and resided in the municipality of Copenhagen (which is the largest municipality in Denmark and includes the capital city) when they were seven years old.

Data Source: Our empirical analysis combines Danish administrative register data from Statistics Denmark with data from an online experiment. The data is physically stored on closed-circuit servers at Statistics Denmark.

Collection Mode(s): other; web-based survey

Weights: no

Unit(s) of Observation: Individuals

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Published Versions

V1 [2020-03-23]

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