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Publication year
Consume Now or Later? Time Inconsistency, Collective Choice, and Revealed Preference
Resource type
Authors/contributors
- Adams, Abi (Author)
- Cherchye, Laurens (Author)
- De Rock, Bram (Author)
- Verriest, Ewout (Author)
Title
Consume Now or Later? Time Inconsistency, Collective Choice, and Revealed Preference
Abstract
We develop a revealed preference methodology that allows us toexplore whether time inconsistencies in household choice are theproduct of individual preference nonstationarities or the result ofindividual heterogeneity and renegotiation within the household.An empirical application to household-level microdata highlightsthat an explicit recognition of the collective nature of householdchoice enables the observed behavior to be rationalized by a theorythat assumes preference stationarity at the individual level. Themethodology created in this paper also facilitates the recovery oftheory-consistent discount rates for each individual within particularhousehold under study. (JEL E24, F13, F16)
Publication
American Economic Review
Volume
104
Issue
12
Pages
4147-83
Date
2014-12
Citation
Adams, A., Cherchye, L., De Rock, B., & Verriest, E. (2014). Consume Now or Later? Time Inconsistency, Collective Choice, and Revealed Preference. American Economic Review, 104, 4147–4183.
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