Do people “have” discount rates?

One thing that economists always talk about, that has struck me as an infelicity for a while, is this talk about someone’s discount rate as if it’s a consistent character trait of a person. Blogspheric example, Cowen: “how to lower your discount rate.” Of course, Posner does it worst: “the lower middle class, which contains a high proportion of people who have very high discount rates, which prevents them from giving significant weight to the future consequences of present behavior.”

Econ readers: is there any empirical support for this notion? (That is, do people’s discount rates tend to be similar across a broad range of activities?) Or is my hunch, that it’s plausible for a person to have a wide variety of discount rates across a wide range of activities, equally well supported by the evidence?

Or is this not even amenable to empirical verification? Here’s that line of thought: suppose Joe Schmoe does very well at going to the gym, but very bad at saving up for retirement. We might interpret that as evidence that our friend Schmoe has a variable discount rate, but perhaps we could equally well interpret it revealed preferences style as Schmoe valuing skinniness much more than he values being able to retire. It seems like it might be really hard to pry apart those phenomena.

Economists? Are you out there?


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