Estimating Discount Rates for Environmental Quality from Utility-Based Choice Experiments
Viscusi, W. Kip
Huber, Joel
Bell, Jason (Economics researcher)
:
2008
Abstract
We estimate rates of time preference using a utility-based choice experiment
administered to a nationally representative sample of 2,914 respondents. For the full
sample, the rate of time preference is very high for immediate benefits and drops off
substantially thereafter, which is inconsistent with exponential discounting but consistent
with hyperbolic discounting. Estimates of the hyperbolic discounting parameter range
from 0.48 to 0.61. Visitors to water bodies have low rates of discount but exhibit
hyperbolic discounting, whereas those who do not visit have consistently high rates of
discount and low valuations of water quality.
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