Measuring Decreasing and Increasing Impatience

Abstract

Many studies show that time preference data from experiments and surveys are related to field behavior. Time preference measures in these studies typically depend simultaneously on utility curvature, the level of impatience, and the change in the level of impatience. Thus, these studies do not allow one to establish which of these three components drive(s) the field behavior of interest. Of these components, the change in the level of impatience is theoretically thought to be the main driver of time inconsistencies and self-control problems. To test this theoretical presumption, one has to measure the change in the level of impatience independently from utilities and levels of impatience. This paper introduces a measure of the degree of decreasing impatience, the DI-index. It measures the change of impatience independently from the level of impatience and independently from utility. It can also be used to test various discounting models. An experiment finds no correlation between the degree of decreasing impatience and selfreported self-control problems in daily life, suggesting that changing impatience is not the sole driver of self-control problems.

Good things come to those who wait—Decreasing impatience for health gains and losses

“…generalized or quasi-hyperbolic discounting when this involves t = 0). Increasing impatience is not captured by these models, even though this has been consistently observed for both health and monetary outcomes [18][19][20][21].…”

“…However, this measure of decreasing impatience requires measurement or assumptions about both D(�) and U(�), which complicates its use in practice. Several other measures, which require fewer assumptions, have been developed and capture non-constant impatience more generally, for example the hyperbolic factor [29], the I 3 (t) measure proposed by Rambaud and Fernández [30], and the DI-index [18]. The latter summary measure of changes in time inconsistency, which approximates Prelec's measure, has several advantages.…”

“…Such decreasing impatience (DI) is also captured by the popular quasi-hyperbolic discounting model [17]. Nonetheless, several studies have found increasing impatience for a considerable proportion of individuals [18][19][20][21]. However, it has proven to be difficult (but possible) to empirically disentangle time inconsistency and discount rates, especially as both may be affected by utility curvature [22,23].…”

“…A recent methodological development in the measurement of time inconsistency was proposed by Rohde [18], who introduced the Decreasing Impatience (DI)-Index. The DI-index is an easy-to-elicit summary measure of the degree of deviation from constant discounting.…”

“…The DI-index is an easy-to-elicit summary measure of the degree of deviation from constant discounting. Rohde [18] showed how the DI-index allows distinguishing between levels of impatience, and changes in time impatience, between different periods. She showed how for monetary outcomes the DI-index can capture changes in time inconsistency, without being affected by utility curvature or the level of impatience.…”