@article{basu_long-run_nodate, title = {Long-{Run} {Labor} {Supply} and the {Elasticity} of {Intertemporal} {Substitution} for {Consumption}}, abstract = {The fact that permanent increases in the real wage have very little e ect on labor supply implies a parameter restriction in the consumption Euler equation augmented by predictable movements in the quantity of labor. This parameter restriction is not rejected by aggregate U.S. data. The implied estimate of the elasticity of intertemporal substitution is around .35, and is signi cantly di erent from zero. This estimate is robust to di erent instrument sets and normalizations. After accounting for the e ects of predictable movements in labor implied by the restriction, there is no remaining evidence in aggregate U.S. data of excess sensitivity of consumption to current income.}, language = {en}, author = {Basu, Susanto and Kimball, Miles S}, file = {Basu and Kimball - Long-Run Labor Supply and the Elasticity of Intert.pdf:/Users/jhall390/Zotero/storage/Z67JQPXK/Basu and Kimball - Long-Run Labor Supply and the Elasticity of Intert.pdf:application/pdf}, } @misc{auclert_macroeconomic_2019, title = {Macroeconomic {Effects} of {Debt} {Relief}: {Consumer} {Bankruptcy} {Protections} in the {Great} {Recession}}, shorttitle = {Macroeconomic {Effects} of {Debt} {Relief}}, url = {https://www.nber.org/papers/w25685}, doi = {10.3386/w25685}, abstract = {This paper argues that the debt forgiveness provided by the U.S. consumer bankruptcy system helped stabilize employment levels during the Great Recession. We document that over this period, states with more generous bankruptcy exemptions had significantly smaller declines in non-tradable employment and larger increases in unsecured debt write-downs compared to states with less generous exemptions. We interpret these reduced form estimates as the relative effect of debt relief across states, and develop a general equilibrium model to recover the aggregate employment effect. The model yields three key results. First, substantial nominal rigidities are required to rationalize our reduced form estimates. Second, with monetary policy at the zero lower bound, traded good demand spillovers across states boosted employment everywhere. Finally, the ex-post debt forgiveness provided by the consumer bankruptcy system during the Great Recession increased aggregate employment by almost two percent.}, urldate = {2024-08-13}, publisher = {National Bureau of Economic Research}, author = {Auclert, Adrien and Dobbie, Will S. and Goldsmith-Pinkham, Paul}, month = mar, year = {2019}, doi = {10.3386/w25685}, note = {Series: Working Paper Series Type: Working Paper}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/V27YJTHB/Auclert et al. - 2019 - Macroeconomic Effects of Debt Relief Consumer Ban.pdf:application/pdf}, } @article{harrison_estimating_2002, title = {Estimating {Individual} {Discount} {Rates} in {Denmark}: {A} {Field} {Experiment}}, volume = {92}, issn = {0002-8282}, shorttitle = {Estimating {Individual} {Discount} {Rates} in {Denmark}}, url = {https://pubs.aeaweb.org/doi/10.1257/000282802762024674}, doi = {10.1257/000282802762024674}, language = {en}, number = {5}, urldate = {2024-08-20}, journal = {American Economic Review}, author = {Harrison, Glenn W and Lau, Morten I and Williams, Melonie B}, month = nov, year = {2002}, pages = {1606--1617}, file = {Submitted Version:/Users/jhall390/Zotero/storage/IR3EEMUS/Harrison et al. - 2002 - Estimating Individual Discount Rates in Denmark A Field Experiment.pdf:application/pdf}, } @article{demarzo_sovereign_2023, title = {Sovereign {Debt} {Ratchets} and {Welfare} {Destruction}}, volume = {131}, issn = {0022-3808}, url = {https://www.journals.uchicago.edu/doi/10.1086/724571}, doi = {10.1086/724571}, abstract = {We study an impatient, risk-neutral government that cannot commit to a particular debt path, financed by competitive lenders. In equilibrium, debt adjusts slowly toward a debt-to-income target, exacerbating booms and busts. Strikingly, gains from trade dissipate when trading is continuous, leaving the government no better off than in financial autarky, owing to a sovereign “debt ratchet effect.” Moreover, citizens who are more patient than their government are strictly harmed. We characterize equilibrium debt dynamics, ergodics, and comparative statics when income follows a geometric Brownian motion and analyze devices that allow the sovereign to recapture gains from trade.}, number = {10}, urldate = {2024-08-20}, journal = {Journal of Political Economy}, author = {DeMarzo, Peter and He, Zhiguo and Tourre, Fabrice}, month = oct, year = {2023}, pages = {2825--2892}, annote = {Publisher: The University of Chicago Press}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/YSNH2FL5/DeMarzo et al. - 2023 - Sovereign Debt Ratchets and Welfare Destruction.pdf:application/pdf}, } @article{ganong_liquidity_2020, title = {Liquidity versus {Wealth} in {Household} {Debt} {Obligations}: {Evidence} from {Housing} {Policy} in the {Great} {Recession}}, volume = {110}, issn = {0002-8282}, shorttitle = {Liquidity versus {Wealth} in {Household} {Debt} {Obligations}}, url = {https://pubs.aeaweb.org/doi/10.1257/aer.20181243}, doi = {10.1257/aer.20181243}, abstract = {We exploit variation in mortgage modifications to disentangle the impact of reducing long-term obligations with no change in short-term payments (“wealth”), and reducing short-term payments with no change in long-term obligations (“liquidity”). Using regression discontinuity and difference-in-differences research designs with administrative data measuring default and consumption, we find that principal reductions that increase wealth without affecting liquidity have no effect, while maturity extensions that increase only liquidity have large effects. This suggests that liquidity drives default and consumption decisions for borrowers in our sample and that distressed debt restructurings can be redesigned with substantial gains to borrowers, lenders, and taxpayers. (JEL E21, G21, G51, R38)}, language = {en}, number = {10}, urldate = {2024-08-20}, journal = {American Economic Review}, author = {Ganong, Peter and Noel, Pascal}, month = oct, year = {2020}, pages = {3100--3138}, file = {PDF:/Users/jhall390/Zotero/storage/74HLMDNP/Ganong and Noel - 2020 - Liquidity versus Wealth in Household Debt Obligations Evidence from Housing Policy in the Great Rec.pdf:application/pdf}, } @article{dobbie_targeted_2020, title = {Targeted {Debt} {Relief} and the {Origins} of {Financial} {Distress}: {Experimental} {Evidence} from {Distressed} {Credit} {Card} {Borrowers}}, volume = {110}, issn = {0002-8282}, shorttitle = {Targeted {Debt} {Relief} and the {Origins} of {Financial} {Distress}}, url = {https://www.aeaweb.org/articles?id=10.1257/aer.20171541}, doi = {10.1257/aer.20171541}, abstract = {We study the drivers of financial distress using a large-scale field experiment that offered randomly selected borrowers a combination of (i) immediate payment reductions to target short-run liquidity constraints and (ii) delayed interest write-downs to target long-run debt constraints. We identify the separate effects of the payment reductions and interest write-downs using both the experiment and cross-sectional variation in treatment intensity. We find that the interest write-downs significantly improved both financial and labor market outcomes, despite not taking effect for three to five years. In sharp contrast, there were no positive effects of the more immediate payment reductions. These results run counter to the widespread view that financial distress is largely the result of short-run constraints.}, language = {en}, number = {4}, urldate = {2024-08-20}, journal = {American Economic Review}, author = {Dobbie, Will and Song, Jae}, month = apr, year = {2020}, keywords = {Household Saving, and Wealth, Borrowing, Debt, Personal Bankruptcy Law}, pages = {984--1018}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/6PRXMKKF/Dobbie and Song - 2020 - Targeted Debt Relief and the Origins of Financial Distress Experimental Evidence from Distressed Cr.pdf:application/pdf}, } @article{indarte_moral_2023, title = {Moral {Hazard} versus {Liquidity} in {Household} {Bankruptcy}}, volume = {78}, issn = {0022-1082, 1540-6261}, url = {https://onlinelibrary.wiley.com/doi/10.1111/jofi.13263}, doi = {10.1111/jofi.13263}, abstract = {This paper studies the role of moral hazard and liquidity in driving household bankruptcy. First, I estimate that increases in potential debt forgiveness have a positive, but small, effect on filing using a regression kink design. Second, exploiting quasi-experimental variation in mortgage payment reductions, I estimate that filing is five times more responsive to cash-on-hand than relief generosity. Using a sufficient statistic, I show the estimates imply large consumption-smoothing benefits of bankruptcy for the marginal filer. Finally, I conclude 83\% of the filing response to dischargeable debt comes from liquidity effects rather than a moral hazard response to financial incentives.}, language = {en}, number = {5}, urldate = {2024-08-20}, journal = {The Journal of Finance}, author = {Indarte, Sasha}, month = oct, year = {2023}, pages = {2421--2464}, file = {PDF:/Users/jhall390/Zotero/storage/BAAN3RWV/Indarte - 2023 - Moral Hazard versus Liquidity in Household Bankruptcy.pdf:application/pdf}, } @article{indarte_debt_nodate, title = {Debt {Relief} for {Households} in {Developing} {Economies}}, abstract = {Households in developing economies have greater access to formal credit today than at any point in history, owing to the global expansion of microfinance and recent innovations in consumer finance such as digital lending. While this has improved the ability to smooth consumption and invest in productive activities, it has also raised concerns about overindebtedness. Against this background, this paper reviews and extends the literature on debt relief for households in developing countries. We begin by laying out a simple stylized model that illustrates the costs and benefits of debt relief and use the model to guide our review of the evidence on various relief policies, such as debt forbearance, debt forgiveness, and personal bankruptcy. We additionally present survey evidence from a population of microfinance and bank borrowers with recent exposure to debt relief. The results highlight that an important downside of discretionary debt relief policies, which are common in developing countries, is their potential to affect borrower expectations and create moral hazard. The development of legal bankruptcy institutions that offer a rules-based avenue to discharge unsustainable debts is a promising path to alleviate the credit market inefficiencies that have often accompanied debt relief initiatives in developing economies.}, language = {en}, author = {Indarte, Sasha and Kanz, Martin}, file = {PDF:/Users/jhall390/Zotero/storage/LLHUW8W9/Indarte and Kanz - Debt Relief for Households in Developing Economies.pdf:application/pdf}, } @article{coller_eliciting_1999, title = {Eliciting {Individual} {Discount} {Rates}}, volume = {2}, issn = {1573-6938}, url = {https://doi.org/10.1023/A:1009986005690}, doi = {10.1023/A:1009986005690}, abstract = {Controlled laboratory conditions using monetary incentives have been utilized in previous studies that examine individual discount rates, and researchers have found several apparently robust anomalies. We conjecture that subject behavior in these experiments may be affected by (uncontrolled) factors other than discount rates. We address some experimental design issues and report a new series of experiments designed to elicit individual discount rates. Our primary treatments include: (i) informing subjects of the annual and effective interest rates associated with alternative payment streams, and (ii) informing subjects of current market interest rates. We also test for the effect of real (vs. hypothetical) payments and for the effect of delaying both payment options (vs. offering an immediate payment option). The statistical analysis uses censored data techniques to account for the interactions between field and lab incentives. Each of the information treatments appears to reduce revealed discount rates. When both types of information are provided, annual rates in the interval of 15\%–17.5\% are revealed, whereas rates of 20\%–25\% are revealed in the control session. Each of the treatments also lowers the residual variance of subject responses.}, language = {en}, number = {2}, urldate = {2024-08-20}, journal = {Experimental Economics}, author = {Coller, Maribeth and Williams, Melonie B.}, month = dec, year = {1999}, keywords = {censored dependent variable, discount rates, experimental economics}, pages = {107--127}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/XNTP3I27/Coller and Williams - 1999 - Eliciting Individual Discount Rates.pdf:application/pdf}, } @article{farber_shadow_1993, title = {Shadow of the {Future}: {Discount} {Rates}, {Later} {Generations}, and the {Environment}, {The}}, volume = {46}, shorttitle = {Shadow of the {Future}}, url = {https://heinonline.org/HOL/P?h=hein.journals/vanlr46&i=281}, language = {eng}, number = {2}, urldate = {2024-08-20}, journal = {Vanderbilt Law Review}, author = {Farber, Daniel A. and Hemmersbaugh, Paul A.}, year = {1993}, pages = {267--304}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/73LITLM4/Farber and Hemmersbaugh - 1993 - Shadow of the Future Discount Rates, Later Generations, and the Environment, The.pdf:application/pdf}, } @article{chang_changes_2024, title = {Changes in {U}.{S}. {Family} {Finances} from 2019 to 2022}, issn = {1556-5068}, url = {https://www.ssrn.com/abstract=4683046}, doi = {10.2139/ssrn.4683046}, language = {en}, urldate = {2024-08-20}, journal = {SSRN Electronic Journal}, author = {Chang, Andrew C. and Aladangady, Aditya and Bricker, Jesse and Goodman, Sarena and Krimmel, Jacob and Moore, Kevin B. and Reber, Sarah and Henriques Volz, Alice and Windle, Richard}, year = {2024}, file = {PDF:/Users/jhall390/Zotero/storage/TFGWJJZK/Chang et al. - 2024 - Changes in U.S. Family Finances from 2019 to 2022.pdf:application/pdf}, } @article{yao_determining_2012, title = {Determining {Consumers}’ {Discount} {Rates} with {Field} {Studies}}, volume = {49}, issn = {0022-2437}, url = {https://doi.org/10.1509/jmr.11.0009}, doi = {10.1509/jmr.11.0009}, abstract = {Because utility/profits, state transitions, and discount rates are confounded in dynamic models, discount rates are typically fixed for the purpose of identification. The authors propose a strategy of identifying discount rates. The identification rests on imputing the utility/profits using decisions made in a context in which the future is inconsequential, the objective function is concave, and the decision space is continuous. They then use these utilities/profits to identify discount rates in contexts in which dynamics become material. The authors exemplify this strategy using a field study in which cell phone users transitioned from a linear to a three-part-tariff pricing plan. They find that the estimated discount rate corresponds to a weekly discount factor (.90), lower than the value typically assumed in empirical research (.995). When using a standard .995 discount factor, they find that the price coefficient is underestimated by 16\%. Moreover, the predicted intertemporal substitution pattern and demand elasticities are biased, leading to a 29\% deterioration in model fit and suboptimal pricing recommendations that would lower potential revenue gains by 76\%.}, language = {en}, number = {6}, urldate = {2024-08-20}, journal = {Journal of Marketing Research}, publisher = {SAGE Publications Inc}, author = {Yao, Song and Mela, Carl F. and Chiang, Jeongwen and Chen, Yuxin}, month = dec, year = {2012}, pages = {822--841}, file = {SAGE PDF Full Text:/Users/jhall390/Zotero/storage/ILKKKAR8/Yao et al. - 2012 - Determining Consumers’ Discount Rates with Field Studies.pdf:application/pdf}, } @incollection{rust_chapter_1994, title = {Chapter 51 {Structural} estimation of markov decision processes}, volume = {4}, url = {https://www.sciencedirect.com/science/article/pii/S1573441205800200}, doi = {10.1016/S1573-4412(05)80020-0}, abstract = {This chapter summarizes the ability of the models to track the shift in departure rates induced by the 1982 window plan. All forecasts were based on the estimated utility function parameters using data prior to 1982. Using these parameters, predictions were generated from all four models after incorporating the extra bonus provisions of the window plan. The structural models were generally able to accurately predict the large increase in departure rates induced by the window plan, although once again none of the models was able to capture the peak in departure rates at age 65. On the other hand, the reduced-form probit model predicted that the window plan had essentially no effect on departure rates. Other reduced-form specifications greatly overpredicted departure rates under the window plan.}, urldate = {2024-08-20}, booktitle = {Handbook of {Econometrics}}, publisher = {Elsevier}, author = {Rust, John}, month = jan, year = {1994}, pages = {3081--3143}, file = {ScienceDirect Snapshot:/Users/jhall390/Zotero/storage/43V63KZE/S1573441205800200.html:text/html}, } @article{rust_optimal_1987, title = {Optimal {Replacement} of {GMC} {Bus} {Engines}: {An} {Empirical} {Model} of {Harold} {Zurcher}}, volume = {55}, issn = {0012-9682}, shorttitle = {Optimal {Replacement} of {GMC} {Bus} {Engines}}, url = {https://www.jstor.org/stable/1911259}, doi = {10.2307/1911259}, abstract = {This paper formulates a simple regenerative optimal stopping model of bus engine replacement to describe the behavior of Harold Zurcher, superintendent of maintenance at the Madison (Wisconsin) Metropolitan Bus Company. The null hypothesis is that Zurcher's decisions on bus engine replacement coincide with an optimal stopping rule: a strategy which specifies whether or not to replace the current bus engine each period as a function of observed and unobserved state variables. The optimal stopping rule is the solution to a stochastic dynamic programming problem that formalizes the trade-off between the conflicting objectives of minimizing maintenance costs versus minimizing unexpected engine failures. The model depends on unknown "primitive parameters" which specify Zurcher's expectations of the future values of the state variables, the expected costs of regular bus maintenance, and his perceptions of the customer goodwill costs of unexpected failures. Using ten years of monthly data on bus mileage and engine replacements for a subsample of 104 buses in the company fleet, I estimate these primitive parameters and test whether Zurcher's behavior is consistent with the model. Admittedly, few people are likely to take particular interest in Harold Zurcher and bus engine replacement per se. I focus on a specific individual and capital good because it provides a simple, concrete framework to illustrate two ideas: (i) a "bottom-up" approach for modelling replacement investment, and (ii) a "nested fixed point" algorithm for estimating dynamic programming models of discrete choice.}, number = {5}, urldate = {2024-08-20}, journal = {Econometrica}, publisher = {[Wiley, Econometric Society]}, author = {Rust, John}, year = {1987}, pages = {999--1033}, file = {JSTOR Full Text PDF:/Users/jhall390/Zotero/storage/ZIENX9CC/Rust - 1987 - Optimal Replacement of GMC Bus Engines An Empirical Model of Harold Zurcher.pdf:application/pdf}, } @article{giglio_very_2015, title = {Very {Long}-{Run} {Discount} {Rates} *}, volume = {130}, issn = {0033-5533}, url = {https://doi.org/10.1093/qje/qju036}, doi = {10.1093/qje/qju036}, abstract = {We estimate how households trade off immediate costs and uncertain future benefits that occur in the very long run, 100 or more years away. We exploit a unique feature of housing markets in the United Kingdom and Singapore, where residential property ownership takes the form of either leaseholds or freeholds. Leaseholds are temporary, prepaid, and tradable ownership contracts with maturities between 99 and 999 years, while freeholds are perpetual ownership contracts. The price difference between leaseholds and freeholds reflects the present value of perpetual rental income starting at leasehold expiration, and is thus informative about very long-run discount rates. We estimate the price discounts for varying leasehold maturities compared to freeholds and extremely long-run leaseholds via hedonic regressions using proprietary data sets of the universe of transactions in each country. Households discount very long-run cash flows at low rates, assigning high present value to cash flows hundreds of years in the future. For example, 100-year leaseholds are valued at more than 10\% less than otherwise identical freeholds, implying discount rates below 2.6\% for 100-year claims.}, number = {1}, urldate = {2024-08-20}, journal = {The Quarterly Journal of Economics}, author = {Giglio, Stefano and Maggiori, Matteo and Stroebel, Johannes}, month = feb, year = {2015}, pages = {1--53}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/BPCKYJFR/Giglio et al. - 2015 - Very Long-Run Discount Rates .pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/QAK9C37R/2337985.html:text/html}, } @article{kirby_delay-discounting_1996, title = {Delay-discounting probabilistic rewards: {Rates} decrease as amounts increase}, volume = {3}, issn = {1531-5320}, shorttitle = {Delay-discounting probabilistic rewards}, url = {https://doi.org/10.3758/BF03210748}, doi = {10.3758/BF03210748}, abstract = {The independence of delay-discounting rate and monetary reward size was tested by offering subjects (N = 621) a series of choices between immediate rewards and larger, delayed rewards. In contrast to previous studies, in which hypothetical rewards have typically been employed, subjects in the present study were entered into a lottery in which they had a chance of actually receiving one of their choices. The delayed rewards were grouped into small (\$30–\$35), medium (\$55–\$65), and large amounts (\$70–\$85). Using a novel parameter estimation procedure, we estimated discounting rates for all three reward sizes for each subject on the basis of his/her pattern of choices. The data indicated that the discounting rate is a decreasing function of the size of the delayed reward (p {\textless} .0001), whether hyperbolic or exponential discounting functions are assumed. In addition, a reliable gender difference was found (p = .005), with males discounting at higher rates than females, on average.}, language = {en}, number = {1}, urldate = {2024-08-20}, journal = {Psychonomic Bulletin \& Review}, author = {Kirby, Kris N. and MarakoviĆ, Nino N.}, month = mar, year = {1996}, keywords = {Choice Trial, Delay Discount, Discount Rate, Hyperbolic Discount, Parameter Estimation Procedure}, pages = {100--104}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/H77XCWTT/Kirby and MarakoviĆ - 1996 - Delay-discounting probabilistic rewards Rates decrease as amounts increase.pdf:application/pdf}, } @article{kirby_heroin_1999, title = {Heroin addicts have higher discount rates for delayed rewards than non-drug-using controls}, volume = {128}, issn = {1939-2222}, doi = {10.1037/0096-3445.128.1.78}, abstract = {Fifty-six heroin addicts and 60 age-matched controls were offered choices between monetary rewards (\$11–\$80) available immediately and larger rewards (\$25–\$85) available after delays ranging from 1 week to 6 months. Participants had a 1-in-6 chance of winning a reward that they chose on one randomly selected trial. Delay-discounting rates were estimated from the pattern of participants' choices. The discounting model of impulsiveness (G. Ainslie, 1975) implies that delay-discounting rates are positively correlated with impulsiveness. On average, heroin addicts' discount rates were twice those of controls (p = .004), and discount rates were positively correlated with impulsivity as measured by self-report questionnaires (p {\textless} .05). The results lend external validity to the delay-discounting rate as a measure of impulsiveness, a characteristic associated with substance abuse. (PsycInfo Database Record (c) 2022 APA, all rights reserved)}, number = {1}, journal = {Journal of Experimental Psychology: General}, publisher = {American Psychological Association}, author = {Kirby, Kris N. and Petry, Nancy M. and Bickel, Warren K.}, year = {1999}, note = {Place: US}, keywords = {Choice Behavior, Delay of Gratification, Heroin Use Disorder, Impulsiveness, Monetary Incentives, Rewards}, pages = {78--87}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/BRIVAEPG/Kirby et al. - 1999 - Heroin addicts have higher discount rates for delayed rewards than non-drug-using controls.pdf:application/pdf}, } @article{cropper_declining_2014, title = {Declining {Discount} {Rates}}, volume = {104}, issn = {0002-8282}, url = {https://www.aeaweb.org/articles?id=10.1257/aer.104.5.538}, doi = {10.1257/aer.104.5.538}, abstract = {We ask whether the US government should replace its current discounting practices with a declining discount rate schedule, as the United Kingdom and France have done, or continue to discount the future at a constant exponential rate. We present the theoretical basis for a declining discount rate (DDR) schedule, but focus on how, in practice, a DDR could be estimated for use by policy analysts. We discuss the empirical approaches in the literature and review how the United Kingdom and France estimated their DDR schedules. We conclude with advice on how the United States might proceed to consider modifying its current discounting practices.}, language = {en}, number = {5}, urldate = {2024-08-20}, journal = {American Economic Review}, author = {Cropper, Maureen L. and Freeman, Mark C. and Groom, Ben and Pizer, William A.}, month = may, year = {2014}, keywords = {Allocative Efficiency, Cost-Benefit Analysis, Project Evaluation, Social Discount Rate}, pages = {538--543}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/23FXZPJI/Cropper et al. - 2014 - Declining Discount Rates.pdf:application/pdf}, } @article{weitzman_gamma_2001, title = {Gamma {Discounting}}, volume = {91}, issn = {0002-8282}, url = {https://www.aeaweb.org/articles?id=10.1257/aer.91.1.260}, doi = {10.1257/aer.91.1.260}, abstract = {By incorporating the probability distribution directly into the analysis, this paper proposes a new theoretical approach to resolving the perennial dilemma of being uncertain about what discount rate to use in cost-benefit analysis. A numerical example is constructed from the results of a survey based on the opinions of 2,160 economists. The main finding is that even if every individual believes in a constant discount rate, the wide spread of opinion on what it should be makes the effective social discount rate decline significantly over time. Implications and ramifications of this proposed "gamma-discounting" approach are discussed.}, language = {en}, number = {1}, urldate = {2024-08-20}, journal = {American Economic Review}, author = {Weitzman, Martin L.}, month = mar, year = {2001}, keywords = {Cost-Benefit Analysis, Project Evaluation, Social Discount Rate, Allocative Efficiency}, pages = {260--271}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/U5VWQRRF/Weitzman - 2001 - Gamma Discounting.pdf:application/pdf}, } @article{arrow_should_2014, title = {Should {Governments} {Use} a {Declining} {Discount} {Rate} in {Project} {Analysis}?}, volume = {8}, issn = {1750-6816}, url = {https://www.journals.uchicago.edu/doi/full/10.1093/reep/reu008}, doi = {10.1093/reep/reu008}, abstract = {Should governments use a discount rate that declines over time when evaluating the future benefits and costs of public projects? The argument for using a declining discount rate (DDR) is simple: if the discount rates that will be applied in the future are uncertain but positively correlated, and if the analyst can assign probabilities to these discount rates, then the result will be a declining schedule of certainty-equivalent discount rates. There is a growing empirical literature that estimates models of long-term interest rates and uses them to forecast the DDR schedule. However, this literature has been criticized because it lacks a connection to the theory of project evaluation. In benefit-cost analysis, the net benefits of a project in year t (in consumption units) are discounted to the present at the rate at which society would trade consumption in year t for consumption in the present. With simplifying assumptions, this leads to the Ramsey discounting formula, which results in a declining certainty-equivalent discount rate if the rate of growth in consumption is uncertain and if shocks to consumption are correlated over time. We conclude that the arguments in favor of a DDR are compelling and thus merit serious consideration by regulatory agencies in the United States. (JEL: D61)}, number = {2}, urldate = {2024-08-20}, journal = {Review of Environmental Economics and Policy}, publisher = {The University of Chicago Press}, author = {Arrow, Kenneth J. and Cropper, Maureen L. and Gollier, Christian and Groom, Ben and Heal, Geoffrey M. and Newell, Richard G. and Nordhaus, William D. and Pindyck, Robert S. and Pizer, William A. and Portney, Paul R. and Sterner, Thomas and Tol, Richard S. J. and Weitzman, Martin L.}, month = jul, year = {2014}, pages = {145--163}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/VYPLJ2SV/Arrow et al. - 2014 - Should Governments Use a Declining Discount Rate in Project Analysis.pdf:application/pdf}, } @article{chabris_individual_2008, title = {Individual laboratory-measured discount rates predict field behavior}, volume = {37}, issn = {1573-0476}, url = {https://doi.org/10.1007/s11166-008-9053-x}, doi = {10.1007/s11166-008-9053-x}, abstract = {We estimate discount rates of 555 subjects using a laboratory task and find that these individual discount rates predict inter-individual variation in field behaviors (e.g., exercise, BMI, smoking). The correlation between the discount rate and each field behavior is small: none exceeds 0.28 and many are near 0. However, the discount rate has at least as much predictive power as any variable in our dataset (e.g., sex, age, education). The correlation between the discount rate and field behavior rises when field behaviors are aggregated: these correlations range from 0.09–0.38. We present a model that explains why specific intertemporal choice behaviors are only weakly correlated with discount rates, even though discount rates robustly predict aggregates of intertemporal decisions.}, language = {en}, number = {2}, urldate = {2024-08-20}, journal = {Journal of Risk and Uncertainty}, author = {Chabris, Christopher F. and Laibson, David and Morris, Carrie L. and Schuldt, Jonathon P. and Taubinsky, Dmitry}, month = dec, year = {2008}, keywords = {Impulsiveness, C, D, Health, I, Intertemporal choice, Intertemporal discounting, Investment, J}, pages = {237--269}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/EN5XPDDL/Chabris et al. - 2008 - Individual laboratory-measured discount rates predict field behavior.pdf:application/pdf}, } @misc{noauthor_valuing_2024, title = {Valuing the {Future}: {Revision} to the {Social} {Discount} {Rate} {Means} {Appropriately} {Assessing} {Benefits} and {Costs} {\textbar} {CEA}}, shorttitle = {Valuing the {Future}}, url = {https://www.whitehouse.gov/cea/written-materials/2024/02/27/valuing-the-future-revision-to-the-social-discount-rate-means-appropriately-assessing-benefits-and-costs/}, abstract = {Many decisions, policies, and regulations generate streams of benefits or costs long into the future. For example, the U.S. phaseout of leaded gasoline in the 1970s and 1980s led to short-run transition costs but major long-run health benefits, including by protecting the neurological development of children who would have otherwise been exposed.  Economic and regulatory…}, language = {en-US}, urldate = {2024-08-20}, journal = {The White House}, month = feb, year = {2024}, file = {Snapshot:/Users/jhall390/Zotero/storage/YIAVJC28/valuing-the-future-revision-to-the-social-discount-rate-means-appropriately-assessing-benefits-.html:text/html}, } @misc{the_white_house_biden-harris_2023, title = {Biden-{Harris} {Administration} {Releases} {Final} {Guidance} to {Improve} {Regulatory} {Analysis} {\textbar} {OMB}}, url = {https://www.whitehouse.gov/omb/briefing-room/2023/11/09/biden-harris-administration-releases-final-guidance-to-improve-regulatory-analysis/}, abstract = {Today, the Office of Information and Regulatory Affairs (OIRA) is issuing revisions to Circular A-4, the government-wide guidance on regulatory analysis. These revisions will help ensure that agencies analyze the consequences of regulations using the most up-to-date economic and scientific understandings. While much of Circular A-4—which was originally issued in 2003 and which has not…}, language = {en-US}, urldate = {2024-08-20}, journal = {The White House}, author = {The White House}, month = nov, year = {2023}, file = {Snapshot:/Users/jhall390/Zotero/storage/R7QALW9Y/biden-harris-administration-releases-final-guidance-to-improve-regulatory-analysis.html:text/html}, } @article{chetty_sufficient_2009, title = {Sufficient {Statistics} for {Welfare} {Analysis}: {A} {Bridge} {Between} {Structural} and {Reduced}-{Form} {Methods}}, volume = {1}, issn = {1941-1383, 1941-1391}, shorttitle = {Sufficient {Statistics} for {Welfare} {Analysis}}, url = {https://www.annualreviews.org/content/journals/10.1146/annurev.economics.050708.142910}, doi = {10.1146/annurev.economics.050708.142910}, abstract = {The debate between structural and reduced-form approaches has generated substantial controversy in applied economics. This article reviews a recent literature in public economics that combines the advantages of reduced-form strategies—transparent and credible identification—with an important advantage of structural models—the ability to make predictions about counterfactual outcomes and welfare. This literature has developed formulas for the welfare consequences of various policies that are functions of reduced-form elasticities rather than structural primitives. I present a general framework that shows how many policy questions can be answered by estimating a small set of sufficient statistics using program-evaluation methods. I use this framework to synthesize the modern literature on taxation, social insurance, and behavioral welfare economics. Finally, I discuss problems in macroeconomics, labor, development, and industrial organization that could be tackled using the sufficient statistic approach.}, language = {en}, number = {Volume 1, 2009}, urldate = {2024-08-21}, journal = {Annual Review of Economics}, publisher = {Annual Reviews}, author = {Chetty, Raj}, month = sep, year = {2009}, pages = {451--488}, file = {Full Text:/Users/jhall390/Zotero/storage/PJ3LQQN3/Chetty - 2009 - Sufficient Statistics for Welfare Analysis A Bridge Between Structural and Reduced-Form Methods.pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/JHSBB8TR/annurev.economics.050708.html:text/html}, } @article{catherine_social_nodate, title = {Social {Security} and {Trends} in {Wealth} {Inequality}}, url = {https://www.dropbox.com/scl/fi/fz8dekk3eewtokbguy3lb/CMS.pdf?dl=0&rlkey=561h8u6vfko6ugw82r93dfw0g}, abstract = {Shared with Dropbox}, language = {en}, urldate = {2025-01-23}, journal = {The Journal of Finance}, author = {Catherine, Sylvain and Miller, Max and Sarin, Natasha}, file = {Snapshot:/Users/jhall390/Zotero/storage/KT8WCCG9/CMS.html:text/html}, } @misc{noauthor_cms_internet_appendixpdf_nodate, title = {cms\_internet\_appendix.pdf}, url = {https://www.dropbox.com/scl/fi/2xrdhepmgjfv4rl8c2gd1/cms_internet_appendix.pdf?dl=0&rlkey=q9bjhtujagbmzyybs58fnzxg6}, abstract = {Shared with Dropbox}, language = {en}, urldate = {2025-01-23}, journal = {Dropbox}, file = {Snapshot:/Users/jhall390/Zotero/storage/8EAVA4GS/cms_internet_appendix.html:text/html}, } @book{campbell_financial_2018, address = {Princeton, NJ}, title = {Financial {Decisions} and {Markets}}, publisher = {Princeton University Press}, author = {Campbell, John Y.}, year = {2018}, } @misc{noauthor_gks_climatefinancepdf_nodate, title = {{GKS}\_ClimateFinance.pdf}, url = {https://drive.google.com/file/d/1JrdI2O18yHh8BmVyoyjPEAlKZ5tBlydv/view?usp=sharing&usp=embed_facebook}, urldate = {2025-01-23}, journal = {Google Docs}, file = {Snapshot:/Users/jhall390/Zotero/storage/MI8KZ6V5/view.html:text/html}, } @article{parker_why_2017, title = {Why {Don}’t {Households} {Smooth} {Consumption}? {Evidence} from a \$25 {Million} {Experiment}}, volume = {9}, issn = {1945-7707, 1945-7715}, shorttitle = {Why {Don}’t {Households} {Smooth} {Consumption}?}, url = {https://pubs.aeaweb.org/doi/10.1257/mac.20150331}, doi = {10.1257/mac.20150331}, abstract = {This paper evaluates theoretical explanations for the propensity of households to increase spending in response to the arrival of predictable, lump-sum payments, using households in the Nielsen Consumer Panel who received \$25 million in randomly distributed stimulus payments. The pattern of spending is inconsistent with models in which identical households cycle rapidly through high and low- response states as they manage liquidity, but is instead highly predictable by income years before the payment. Spending responses are unrelated to expectation errors, almost unrelated to crude measures of procrastination and self-control, significantly related to sophistication and planning, and highly related to impatience. (JEL D12, D14, D91, E21, H23)}, language = {en}, number = {4}, urldate = {2025-01-30}, journal = {American Economic Journal: Macroeconomics}, author = {Parker, Jonathan A.}, month = oct, year = {2017}, pages = {153--183}, file = {PDF:/Users/jhall390/Zotero/storage/DKB6HSMF/Parker - 2017 - Why Don’t Households Smooth Consumption Evidence from a \$25 Million Experiment.pdf:application/pdf}, } @article{brunnermeier_optimal_2017, title = {Optimal {Time}-{Inconsistent} {Beliefs}: {Misplanning}, {Procrastination}, and {Commitment}}, volume = {63}, issn = {0025-1909, 1526-5501}, shorttitle = {Optimal {Time}-{Inconsistent} {Beliefs}}, url = {https://pubsonline.informs.org/doi/10.1287/mnsc.2015.2360}, doi = {10.1287/mnsc.2015.2360}, abstract = {We develop a structural theory of beliefs and behavior that relaxes the assumption of time consistency in beliefs. Our theory is based on the trade-off between optimism, which raises anticipatory utility, and objectivity, which promotes efficient actions. We present it in the context of allocating work on a project over time, develop testable implications to contrast it with models assuming time-inconsistent preferences, and compare its predictions to existing evidence on behavior and beliefs. Our predictions are that (i) optimal beliefs are optimistic and time inconsistent; (ii) people optimally exhibit the planning fallacy; (iii) incentives for rapid task completion make beliefs more optimistic and worsen work smoothing, whereas incentives for accurate duration prediction make beliefs less optimistic and improve work smoothing; (iv) without a commitment device, beliefs become less optimistic over time; and (v) in the presence of a commitment device, beliefs may become more optimistic over time, and people optimally exhibit preference for commitment.}, language = {en}, number = {5}, urldate = {2025-01-30}, journal = {Management Science}, author = {Brunnermeier, Markus K. and Papakonstantinou, Filippos and Parker, Jonathan A.}, month = may, year = {2017}, pages = {1318--1340}, file = {PDF:/Users/jhall390/Zotero/storage/5AP6ACCH/Brunnermeier et al. - 2017 - Optimal Time-Inconsistent Beliefs Misplanning, Procrastination, and Commitment.pdf:application/pdf}, } @article{duarte_simple_nodate, title = {Simple {Allocation} {Rules} and {Optimal} {Portfolio} {Choice} {Over} the {Lifecycle}}, abstract = {We develop a machine-learning solution algorithm to solve for optimal portfolio choice in a lifecycle model that includes many features of reality modelled only separately in previous work. We use the quantitative model to evaluate the consumption-equivalent welfare losses from using simple rules for portfolio allocation across stocks, bonds, and liquid accounts instead of the optimal portfolio choices, both for optimizing households and for households that undersave. We find that the consumption-equivalent losses from using an age-dependent rule as embedded in current target-date/lifecycle funds (TDFs) are substantial, around 2 to 3 percent of consumption, despite the fact that TDF rules mimic average optimal behavior by age closely until shortly before retirement. Optimal equity shares have substantial heterogeneity, particularly by wealth level, state of the business cycle, and dividend-price ratio, implying substantial gains to further customization of advice or TDFs in these dimensions.}, language = {en}, author = {Duarte, Victor}, file = {PDF:/Users/jhall390/Zotero/storage/WSJPWP53/Duarte - Simple Allocation Rules and Optimal Portfolio Choice Over the Lifecycle.pdf:application/pdf}, } @misc{noauthor_countercyclicalriskpdf_nodate, title = {{CounterCyclicalRisk}.pdf}, url = {https://www.dropbox.com/scl/fi/o442ylo6hl6lcajm4gl4a/CounterCyclicalRisk.pdf?dl=0&rlkey=6826yt24cmpch8eprb2g27981}, abstract = {Shared with Dropbox}, language = {en}, urldate = {2025-01-30}, journal = {Dropbox}, file = {Snapshot:/Users/jhall390/Zotero/storage/E7FFVQX4/CounterCyclicalRisk.html:text/html}, } @article{guvenen_what_2021, title = {What {Do} {Data} on {Millions} of {U}.{S}. {Workers} {Reveal} {About} {Lifecycle} {Earnings} {Dynamics}?}, volume = {89}, issn = {0012-9682}, url = {https://www.econometricsociety.org/doi/10.3982/ECTA14603}, doi = {10.3982/ECTA14603}, abstract = {We study individual male earnings dynamics over the life cycle using panel data on millions of U.S. workers. Using nonparametric methods, we first show that the distribution of earnings changes exhibits substantial deviations from lognormality, such as negative skewness and very high kurtosis. Further, the extent of these nonnormalities varies significantly with age and earnings level, peaking around age 50 and between the 70th and 90th percentiles of the earnings distribution. Second, we estimate nonparametric impulse response functions and find important asymmetries: Positive changes for highincome individuals are quite transitory, whereas negative ones are very persistent; the opposite is true for low-income individuals. Third, we turn to long-run outcomes and find substantial heterogeneity in the cumulative growth rates of earnings and the total number of years individuals spend nonemployed between ages 25 and 55. Finally, by targeting these rich sets of moments, we estimate stochastic processes for earnings that range from the simple to the complex. Our preferred specification features normal mixture innovations to both persistent and transitory components and includes statedependent long-term nonemployment shocks with a realization probability that varies with age and earnings.}, language = {en}, number = {5}, urldate = {2025-01-30}, journal = {Econometrica}, author = {Guvenen, Fatih and Karahan, Fatih and Ozkan, Serdar and Song, Jae}, year = {2021}, pages = {2303--2339}, file = {PDF:/Users/jhall390/Zotero/storage/Q8M7UEPR/Guvenen et al. - 2021 - What Do Data on Millions of U.S. Workers Reveal About Lifecycle Earnings Dynamics.pdf:application/pdf}, } @article{guvenen_consumption_nodate, title = {Consumption {Based} {Asset} {Pricing} {Models}: {Empirical} {Performance}}, abstract = {Asset pricing is a branch of Önancial economics with a plentiful and constant supply of puzzles and anomaliesó that is, stylized empirical facts that are robust to straightforward extensions of the canonical asset pricing models. These range from the equity premium puzzle and the risk-free rate puzzle to the fact that stock returns are highly predictable. This entry discusses di§erent consumption based asset pricing models that have been developed to resolve these puzzles and it evaluates their empirical performance.}, language = {en}, author = {Guvenen, Fatih and Lustig, Hanno}, file = {PDF:/Users/jhall390/Zotero/storage/KRTGUCKK/Guvenen and Lustig - Consumption Based Asset Pricing Models Empirical Performance.pdf:application/pdf}, } @article{guvenen_reconciling_2006, title = {Reconciling conflicting evidence on the elasticity of intertemporal substitution: {A} macroeconomic perspective}, volume = {53}, copyright = {https://www.elsevier.com/tdm/userlicense/1.0/}, issn = {03043932}, shorttitle = {Reconciling conflicting evidence on the elasticity of intertemporal substitution}, url = {https://linkinghub.elsevier.com/retrieve/pii/S0304393206000626}, doi = {10.1016/j.jmoneco.2005.06.001}, language = {en}, number = {7}, urldate = {2025-01-30}, journal = {Journal of Monetary Economics}, author = {Guvenen, Fatih}, month = oct, year = {2006}, pages = {1451--1472}, file = {PDF:/Users/jhall390/Zotero/storage/ZMKEKRSV/Guvenen - 2006 - Reconciling conflicting evidence on the elasticity of intertemporal substitution A macroeconomic pe.pdf:application/pdf}, } @article{kim_us_nodate, title = {{US} {Fiscal} {Cycle}, {Risk}-{Sharing} and the {US} {Safety} {Puzzle}}, abstract = {The United States (US) is a relatively safe country: her global consumption and wealth shares are countercyclical. These findings are hard to square with the traditional view that the US is the global insurance provider. Given this challenge, I build a model where the US assumes the exact opposite role. Driving this twist is a fiscal asymmetry: the US runs more countercyclical fiscal policy than other countries. Taking this as given the US emerges as the global insurance receiver, enabling my model to rationalise many key features of the modern global financial system. Key to these results is the interaction between the US fiscal condition, global innovation and growth, international risk-sharing, the dollar and global risk premia. These results therefore highlight the special role that the US fiscal policy plays in driving puzzling features within the modern global financial system, a novel insight that has received surprisingly little emphasis thus far.}, language = {en}, author = {Kim, Sun Yong}, file = {PDF:/Users/jhall390/Zotero/storage/VX89ZKXB/Kim - US Fiscal Cycle, Risk-Sharing and the US Safety Puzzle.pdf:application/pdf}, } @article{epstein_substitution_1991, title = {Substitution, {Risk} {Aversion}, and the {Temporal} {Behavior} of {Consumption} and {Asset} {Returns}: {An} {Empirical} {Analysis}}, volume = {99}, issn = {0022-3808}, shorttitle = {Substitution, {Risk} {Aversion}, and the {Temporal} {Behavior} of {Consumption} and {Asset} {Returns}}, url = {https://www.journals.uchicago.edu/doi/abs/10.1086/261750}, doi = {10.1086/261750}, abstract = {This paper investigates the testable restrictions on the time-series behavior of consumption and asset returns implied by a representative agent model in which intertemporal preferences are represented by utility functions that generalize conventional, time-additive, expected utility. The model based on these preferences allows a clearer separation of observable behavior attributable to risk aversion and to intertemporal substitution. Further, it nests the predictions of both the consumption CAPM and the static CAPM, and it allows direct tests of the expected utility hypothesis. We find that the performance of the non-expected utility model and tests of the expected utility hypothesis are sensitive to the choice of both consumption measure and instrumental variables.}, number = {2}, urldate = {2025-01-30}, journal = {Journal of Political Economy}, publisher = {The University of Chicago Press}, author = {Epstein, Larry G. and Zin, Stanley E.}, month = apr, year = {1991}, pages = {263--286}, } @misc{lustig_wealth-consumption_2008, type = {Working {Paper}}, series = {Working {Paper} {Series}}, title = {The {Wealth}-{Consumption} {Ratio}}, url = {https://www.nber.org/papers/w13896}, doi = {10.3386/w13896}, abstract = {We set up an exponentially affine stochastic discount factor model for bond yields and stock returns in order to estimate the prices of aggregate risk. We use the estimated risk prices to compute the no-arbitrage price of a claim to aggregate consumption. The price-dividend ratio of this claim is the wealth-consumption ratio. Our estimates indicate that total wealth is much safer than stock market wealth. The consumption risk premium is only 2.2 percent, substantially below the equity risk premium of 6.9 percent. As a result, the average US household has more wealth than one might think; most of it is human wealth. A large fraction of the variation in total wealth can be traced back to changes in long-term real interest rates. Contrary to conventional wisdom, we find that events in bond markets, not stock markets, matter most for understanding fluctuations in total wealth.}, urldate = {2025-01-30}, publisher = {National Bureau of Economic Research}, author = {Lustig, Hanno and Van Nieuwerburgh, Stijn and Verdelhan, Adrien}, month = mar, year = {2008}, doi = {10.3386/w13896}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/U3CSCQAD/Lustig et al. - 2008 - The Wealth-Consumption Ratio.pdf:application/pdf}, } @article{bansal_risks_2004, title = {Risks for the {Long} {Run}: {A} {Potential} {Resolution} of {Asset} {Pricing} {Puzzles}}, volume = {59}, copyright = {© 2004 the American Finance Association}, issn = {1540-6261}, shorttitle = {Risks for the {Long} {Run}}, url = {https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.2004.00670.x}, doi = {10.1111/j.1540-6261.2004.00670.x}, abstract = {We model consumption and dividend growth rates as containing (1) a small long-run predictable component, and (2) fluctuating economic uncertainty (consumption volatility). These dynamics, for which we provide empirical support, in conjunction with Epstein and Zin's (1989) preferences, can explain key asset markets phenomena. In our economy, financial markets dislike economic uncertainty and better long-run growth prospects raise equity prices. The model can justify the equity premium, the risk-free rate, and the volatility of the market return, risk-free rate, and the price–dividend ratio. As in the data, dividend yields predict returns and the volatility of returns is time-varying.}, language = {en}, number = {4}, urldate = {2025-01-30}, journal = {The Journal of Finance}, author = {Bansal, Ravi and Yaron, Amir}, year = {2004}, note = {\_eprint: https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1540-6261.2004.00670.x}, pages = {1481--1509}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/8XG67Z5X/Bansal and Yaron - 2004 - Risks for the Long Run A Potential Resolution of Asset Pricing Puzzles.pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/FWFW75FX/j.1540-6261.2004.00670.html:text/html}, } @misc{lustig_market_2005, type = {Working {Paper}}, series = {Working {Paper} {Series}}, title = {The {Market} {Price} of {Aggregate} {Risk} and the {Wealth} {Distribution}}, url = {https://www.nber.org/papers/w11132}, doi = {10.3386/w11132}, abstract = {We introduce limited liability in a model with a continuum of ex ante identical agents who face aggregate and idiosyncratic income risk. These agents can trade a complete menu of contingent claims, but they cannot commit and shares in a Lucas tree serve as collateral to back up their state-contingent promises. The limited liability option gives rise to a second risk factor, in addition to aggregate consumption growth risk. This liquidity risk is created by binding solvency constraints, and it is measured by the growth rate of one moment of the wealth distribution. The economy is said to experience a negative liquidity shock when this growth rate is high and a large fraction of agents faces severely binding solvency constraints. The adjustment to the Breeden-Lucas stochastic discount factor induces substantial time variation in equity risk premia that is consistent with the data at business cycle frequencies.}, urldate = {2025-01-30}, publisher = {National Bureau of Economic Research}, author = {Lustig, Hanno and Chien, Yi-Li}, month = feb, year = {2005}, doi = {10.3386/w11132}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/FU5F4QN7/Lustig and Chien - 2005 - The Market Price of Aggregate Risk and the Wealth Distribution.pdf:application/pdf}, } @article{alvarez_quantitative_2001, title = {Quantitative {Asset} {Pricing} {Implications} of {Endogenous} {Solvency} {Constraints}}, volume = {14}, issn = {0893-9454}, url = {https://doi.org/10.1093/rfs/14.4.1117}, doi = {10.1093/rfs/14.4.1117}, abstract = {We study the asset pricing implications of an economy where solvency constraints are endogenously determined to deter agents from defaulting while allowing as much risk sharing as possible. We solve analytically for efficient allocations and for the corresponding asset prices, portfolio holdings, and solvency constraints for a simple example. Then we calibrate a more general model to U.S. aggregate as well as idiosyncratic income processes. We find equity premia, risk premia for long-term bonds, and Sharpe ratios of magnitudes similar to the U.S. data for lowrisk aversion and a low time-discount factor.}, number = {4}, urldate = {2025-01-30}, journal = {The Review of Financial Studies}, author = {Alvarez, Fernando and Jermann, Urban J.}, month = oct, year = {2001}, pages = {1117--1151}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/R3FZFF93/Alvarez and Jermann - 2001 - Quantitative Asset Pricing Implications of Endogenous Solvency Constraints.pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/NP7PHFIV/1596184.html:text/html}, } @article{kreps_temporal_1978, title = {Temporal {Resolution} of {Uncertainty} and {Dynamic} {Choice} {Theory}}, volume = {46}, issn = {0012-9682}, url = {https://www.jstor.org/stable/1913656}, doi = {10.2307/1913656}, abstract = {We consider dynamic choice behavior under conditions of uncertainty, with emphasis on the timing of the resolution of uncertainty. Choice behavior in which an individual distinguishes between lotteries based on the times at which their uncertainty resolves is axiomatized and represented, thus the result is choice behavior which cannot be represented by a single cardinal utility function on the vector of payoffs. Both descriptive and normative treatments of the problem are given and are shown to be equivalent. Various specializations are provided, including an extension of "separable" utility and representation by a single cardinal utility function.}, number = {1}, urldate = {2025-01-30}, journal = {Econometrica}, publisher = {[Wiley, Econometric Society]}, author = {Kreps, David M. and Porteus, Evan L.}, year = {1978}, pages = {185--200}, file = {JSTOR Full Text PDF:/Users/jhall390/Zotero/storage/SY3XS8QL/Kreps and Porteus - 1978 - Temporal Resolution of Uncertainty and Dynamic Choice Theory.pdf:application/pdf}, } @article{di_tella_zero-beta_2024, title = {The {Zero}-{Beta} {Interest} {Rate}}, abstract = {We use equity returns to construct a time-varying measure of the zero-beta interest rate: the expected return of a stock portfolio orthogonal to the stochastic discount factor. In contrast to safe rates, the zero-beta rate fits the aggregate consumption Euler equation remarkably well, both unconditionally and conditional on monetary policy shocks, and is high, volatile, and persistent enough to explain the average return and most of the volatility of the market portfolio. It is the behavior of safe rates that is puzzling.}, language = {en}, author = {Di Tella, Sebastian and Hébert, Benjamin and Kurlat, Pablo and Wang, Qitong}, year = {2024}, file = {PDF:/Users/jhall390/Zotero/storage/6A5NQQEY/Kurlat and Wang - Sebastian Di Tella Benjamin Hébert.pdf:application/pdf}, } @article{rubinstein_perfect_1982, title = {Perfect {Equilibrium} in a {Bargaining} {Model}}, volume = {50}, issn = {0012-9682}, url = {https://www.jstor.org/stable/1912531}, doi = {10.2307/1912531}, abstract = {Two players have to reach an agreement on the partition of a pie of size 1. Each has to make in turn, a proposal as to how it should be divided. After one player has made an offer, the other must decide either to accept it, or to reject it and continue the bargaining. Several properties which the players' preferences possess are assumed. The Perfect Equilibrium Partitions (P.E.P.) are characterized in all the models satisfying these assumptions. Specially, it is proved that when every player bears a fixed bargaining cost for each period (c$_{\textrm{1}}$ and c$_{\textrm{2}}$), then: (i) if {\textless}latex{\textgreater}\$c\_\{1\}{\textless}c\_\{2\}\${\textless}/latex{\textgreater} the only P.E.P. gives all the pie to 1; (ii) if {\textless}latex{\textgreater}\$c\_\{1\}{\textgreater}c\_\{2\}\${\textless}/latex{\textgreater} the only P.E.P. gives to 1 only c$_{\textrm{2}}$. In the case where each player has a fixed discounting factor (δ $_{\textrm{1}}$ and δ $_{\textrm{2}}$) the only P.E.P. is {\textless}tex-math{\textgreater}\$(1-{\textbackslash}delta \_\{2\})/(1-{\textbackslash}delta \_\{1\}{\textbackslash}delta \_\{2\})\${\textless}/tex-math{\textgreater}.}, number = {1}, urldate = {2025-01-31}, journal = {Econometrica}, publisher = {[Wiley, Econometric Society]}, author = {Rubinstein, Ariel}, year = {1982}, pages = {97--109}, file = {JSTOR Full Text PDF:/Users/jhall390/Zotero/storage/6ZFZRZUX/Rubinstein - 1982 - Perfect Equilibrium in a Bargaining Model.pdf:application/pdf}, } @article{cohen_measuring_2020, title = {Measuring {Time} {Preferences}}, volume = {58}, issn = {0022-0515}, url = {https://www.aeaweb.org/articles?id=10.1257/jel.20191074}, doi = {10.1257/jel.20191074}, abstract = {We review research that measures time preferences—i.e., preferences over intertemporal trade-offs. We distinguish between studies using financial flows, which we call "money earlier or later" (MEL) decisions, and studies that use time-dated consumption/effort. Under different structural models, we show how to translate what MEL experiments directly measure (required rates of return for financial flows) into a discount function over utils. We summarize empirical regularities found in MEL studies and the predictive power of those studies. We explain why MEL choices are driven in part by some factors that are distinct from underlying time preferences.}, language = {en}, number = {2}, urldate = {2025-02-05}, journal = {Journal of Economic Literature}, author = {Cohen, Jonathan and Ericson, Keith Marzilli and Laibson, David and White, John Myles}, month = jun, year = {2020}, keywords = {Dynamic Analysis, Intertemporal Household Choice, Life Cycle Models and Saving, Optimization Techniques, Programming Models}, pages = {299--347}, file = {Full Text:/Users/jhall390/Zotero/storage/XYA3BSYA/Cohen et al. - 2020 - Measuring Time Preferences.pdf:application/pdf}, } @article{andersen_eliciting_2008, title = {Eliciting {Risk} and {Time} {Preferences}}, volume = {76}, issn = {1468-0262}, url = {https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1468-0262.2008.00848.x}, doi = {10.1111/j.1468-0262.2008.00848.x}, abstract = {We design experiments to jointly elicit risk and time preferences for the adult Danish population. Since subjects are generally risk averse, we find that joint elicitation provides estimates of discount rates that are significantly lower than those found in previous studies and more in line with what would be considered as a priori reasonable rates. The statistical specification relies on a theoretical framework that involves a latent trade-off between long-run optimization and short-run temptation. Estimation of this specification is undertaken using structural, maximum likelihood methods. Our main results based on exponential discounting are robust to alternative specifications such as hyperbolic discounting. These results have direct implications for attempts to elicit time preferences, as well as debates over the appropriate domain of the utility function when characterizing risk aversion and time consistency.}, language = {en}, number = {3}, urldate = {2025-02-05}, journal = {Econometrica}, author = {Andersen, Steffen and Harrison, Glenn W. and Lau, Morten I. and Rutström, E. Elisabet}, year = {2008}, note = {\_eprint: https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1468-0262.2008.00848.x}, keywords = {Discount rate, field experiment, risk aversion}, pages = {583--618}, file = {Snapshot:/Users/jhall390/Zotero/storage/LUIZQ5XJ/j.1468-0262.2008.00848.html:text/html}, } @article{hall_credit_2024, title = {Credit {Cards} and {Retail} {Firms}: {Historical} {Evidence} from the {U}.{S}.}, journal = {Working Paper}, author = {Hall, Joseph}, year = {2024}, } @article{laibson_wealth_2002, title = {Wealth {Accumulation}, {Credit} {Card} {Borrowing}, and {Consumption}-{Income} {Comovement}}, journal = {Working Paper}, author = {Laibson, David and Repetto, Andrea and Tobacman, Jeremy}, year = {2002}, } @article{laibson_estimating_2024, title = {Estimating {Discount} {Functions} with {Consumption} {Choices} over the {Lifecycle}}, issn = {0893-9454}, url = {https://doi.org/10.1093/rfs/hhae035}, doi = {10.1093/rfs/hhae035}, abstract = {We estimate β-δ time preferences and relative risk aversion (RRA) using a lifecycle model including stochastic income, liquid and illiquid assets, credit cards, dependents, Social Security, mortality, and bequests. Preference parameters are identified by cross-tabulating four lifecycle age intervals and four balance sheet moments: the share of households carrying (ie, revolving) credit card debt, average carried credit card debt, average net wealth among households carrying credit card debt, and average net wealth among households not carrying credit card debt. The 16 moments are approximately matched by (MSM) parameter estimates β=0.53, δ=0.99, and RRA = 1.9.}, urldate = {2025-02-11}, journal = {The Review of Financial Studies}, author = {Laibson, David and Lee, Sean Chanwook and Maxted, Peter and Repetto, Andrea and Tobacman, Jeremy}, month = jul, year = {2024}, pages = {hhae035}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/NWRTJHFT/Laibson et al. - 2024 - Estimating Discount Functions with Consumption Choices over the Lifecycle.pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/JPKNY274/7703274.html:text/html}, } @article{ganong_consumer_2019, title = {Consumer {Spending} during {Unemployment}: {Positive} and {Normative} {Implications}}, volume = {109}, issn = {0002-8282}, shorttitle = {Consumer {Spending} during {Unemployment}}, url = {https://www.aeaweb.org/articles?id=10.1257/aer.20170537}, doi = {10.1257/aer.20170537}, abstract = {Using de-identified bank account data, we show that spending drops sharply at the large and predictable decrease in income arising from the exhaustion of unemployment insurance (UI) benefits. We use the high-frequency response to a predictable income decline as a new test to distinguish between alternative consumption models. The sensitivity of spending to income we document is inconsistent with rational models of liquidity-constrained households, but is consistent with behavioral models with present-biased or myopic households. Depressed spending after exhaustion also implies that the consumption-smoothing gains from extending UI benefits are four times larger than from raising UI benefit levels.}, language = {en}, number = {7}, urldate = {2025-02-11}, journal = {American Economic Review}, author = {Ganong, Peter and Noel, Pascal}, month = jul, year = {2019}, keywords = {Household Saving, Aggregate Human Capital, Intergenerational Income Distribution, Saving, Unemployment, Wages, Wealth, Employment, Aggregate Labor Productivity, Macro-Based Behavioral Economics: General, Unemployment Insurance, Personal Finance, Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making, Macroeconomics: Consumption, Plant Closings, Severance Pay}, pages = {2383--2424}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/Z9PP3ASR/Ganong and Noel - 2019 - Consumer Spending during Unemployment Positive and Normative Implications.pdf:application/pdf}, } @article{gross_liquidity_2002, title = {Do {Liquidity} {Constraints} and {Interest} {Rates} {Matter} for {Consumer} {Behavior}? {Evidence} from {Credit} {Card} {Data}*}, volume = {117}, issn = {0033-5533}, shorttitle = {Do {Liquidity} {Constraints} and {Interest} {Rates} {Matter} for {Consumer} {Behavior}?}, url = {https://doi.org/10.1162/003355302753399472}, doi = {10.1162/003355302753399472}, abstract = {This paper utilizes a unique data set of credit card accounts to analyze how people respond to credit supply. Increases in credit limits generate an immediate and significant rise in debt, counter to the Permanent-Income Hypothesis. The “MPC out of liquidity” is largest for people starting near their limit, consistent with binding liquidity constraints. However, the MPC is significant even for people starting well below their limit, consistent with precautionary models. Nonetheless, there are other results that conventional models cannot easily explain, for example, why so many people are borrowing on their credit cards, and simultaneously holding low yielding assets. The long-run elasticity of debt to the interest rate is approximately -1.3, less than half of which represents balance-shifting across cards.}, number = {1}, urldate = {2025-02-11}, journal = {The Quarterly Journal of Economics}, author = {Gross, David B. and Souleles, Nicholas S.}, month = feb, year = {2002}, pages = {149--185}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/U587B3FS/Gross and Souleles - 2002 - Do Liquidity Constraints and Interest Rates Matter for Consumer Behavior Evidence from Credit Card.pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/UDEZ7NM4/1851757.html:text/html}, } @article{hendren_unified_2020, title = {A {Unified} {Welfare} {Analysis} of {Government} {Policies}}, volume = {135}, url = {https://dx.doi.org/10.1093/qje/qjaa006}, abstract = {Abstract. We conduct a comparative welfare analysis of 133 historical policy changes over the past half-century in the United States, focusing on policies}, language = {en}, number = {3}, urldate = {2025-02-12}, journal = {The Quarterly Journal of Economics}, author = {Hendren, Nathaniel and Sprung-Keyser, Ben}, month = mar, year = {2020}, pages = {1209--1318}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/E32AAD4N/Hendren and Sprung-Keyser - A Unified Welfare Analysis of Government Policies.pdf:application/pdf}, } @article{alem_intertemporal_nodate, title = {Intertemporal choice bracketing}, abstract = {The implications of commonly used money earlier or later (MEL) games for intertemporal behavior depend critically upon subjects’ choice bracketing. If subjects bracket narrowly, responses reflect preferences independent of subjects’ financial environment. Alternatively, if subjects bracket broadly, responses reflect subjects’ marginal returns to investment. We test both hypotheses in a lab-in-the-field experiment, which involves repeated MEL games, a large unconditional cash transfer, and an illiquid savings product. Subjects do not narrowly bracket – randomized cash transfers induce greater patience in MEL choices. Subjects do not broadly bracket either – they fail to arbitrage across equivalent MEL and savings opportunities. We provide a conceptual framework and present evidence that narrowly bracketing subjects drive the predictive power of MEL outcomes for financial choices, justifying the common practice of interpreting MEL choices as a proxy for time preferences rather than financial environment.}, language = {en}, author = {Alem, Yonas and Loeser, John and Mahajan, Aprajit}, file = {PDF:/Users/jhall390/Zotero/storage/YGR2H5CG/Alem et al. - Intertemporal choice bracketing.pdf:application/pdf}, } @article{eden_cross-sectional_2023, title = {The {Cross}-{Sectional} {Implications} of the {Social} {Discount} {Rate}}, volume = {91}, copyright = {© 2023 The Author. Econometrica published by John Wiley \& Sons Ltd on behalf of The Econometric Society}, issn = {1468-0262}, url = {https://onlinelibrary.wiley.com/doi/abs/10.3982/ECTA20844}, doi = {10.3982/ECTA20844}, abstract = {In this paper, I consider two normative questions: (1) how should policymakers approach tradeoffs that involve different age groups, and (2) at what rate should policymakers discount the consumption of future generations? I demonstrate that, under standard assumptions, these two questions are equivalent: caring more about the future means caring less about the elderly. Even small differences between the social discount rate and the market interest rate can have significant quantitative implications for the relative value placed on the consumption of different age groups.}, language = {en}, number = {6}, urldate = {2025-06-17}, journal = {Econometrica}, author = {Eden, Maya}, year = {2023}, note = {\_eprint: https://onlinelibrary.wiley.com/doi/pdf/10.3982/ECTA20844}, keywords = {age-based inequality, consequentialism, Overlapping generations, utilitarianism}, pages = {2065--2088}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/THT75DHT/Eden - 2023 - The Cross-Sectional Implications of the Social Discount Rate.pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/N5VAWBF8/10.html:text/html}, } @article{stern_economics_2008, title = {The {Economics} of {Climate} {Change}}, volume = {98}, issn = {0002-8282}, url = {https://www.aeaweb.org/articles?id=10.1257/aer.98.2.1}, doi = {10.1257/aer.98.2.1}, language = {en}, number = {2}, urldate = {2025-06-17}, journal = {American Economic Review}, author = {Stern, Nicholas}, month = may, year = {2008}, keywords = {Climate, Climate; Natural Disasters; Global Warming, Global Warming, Natural Disasters}, pages = {1--37}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/UXKYC8GT/Stern - 2008 - The Economics of Climate Change.pdf:application/pdf}, } @article{nordhaus_review_2007, title = {A {Review} of the {Stern} {Review} on the {Economics} of {Climate} {Change}}, volume = {45}, issn = {0022-0515}, url = {https://www.aeaweb.org/articles?id=10.1257/jel.45.3.686}, doi = {10.1257/jel.45.3.686}, abstract = {'s unambiguous conclusions about the need for extreme immediate action will not survive the substitution of assumptions that are consistent with today's marketplace real interest rates and savings rates.}, language = {en}, number = {3}, urldate = {2025-06-17}, journal = {Journal of Economic Literature}, author = {Nordhaus, William D.}, month = sep, year = {2007}, keywords = {Climate; Natural Disasters; Global Warming, Natural Disasters, Environmental Economics: Government Policy, Global Warming, Environmental Economics: Government Policy, One, Two, and Multisector Growth Models, One, Two, and Multisector Growth Models, Valuation of Environmental Effects, Climate, Valuation of Environmental Effects}, pages = {686--702}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/EPRR3USU/Nordhaus - 2007 - A Review of the Stern Review on the Economics of Climate Change.pdf:application/pdf}, } @article{andreoni_estimating_2012, title = {Estimating {Time} {Preferences} from {Convex} {Budgets}}, volume = {102}, issn = {0002-8282}, url = {https://www.aeaweb.org/articles?id=10.1257/aer.102.7.3333}, doi = {10.1257/aer.102.7.3333}, abstract = {Experimentally elicited discount rates are frequently higher than what seems reasonable for economic decision-making. Such high rates are often attributed to present-biased discounting. A well-known bias of standard measurements is the assumption of linear consumption utility. Attempting to correct this bias using measures of risk aversion to identify concavity, researchers find reasonable discounting but at the cost of exceptionally high utility function curvature. We present a new methodology for identifying time preferences, both discounting and curvature, from simple allocation decisions. We find reasonable levels of both discounting and curvature and, surprisingly, dynamically consistent time preferences. (JEL C91, D12, D81)}, language = {en}, number = {7}, urldate = {2025-06-17}, journal = {American Economic Review}, author = {Andreoni, James and Sprenger, Charles}, month = dec, year = {2012}, keywords = {Consumer Economics: Empirical Analysis, Criteria for Decision-Making under Risk and Uncertainty, Design of Experiments: Laboratory, Design of Experiments: Laboratory, Individual, Individual}, pages = {3333--3356}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/GLSSG2AH/Andreoni and Sprenger - 2012 - Estimating Time Preferences from Convex Budgets.pdf:application/pdf}, } @article{lawrance_poverty_1991, title = {Poverty and the {Rate} of {Time} {Preference}: {Evidence} from {Panel} {Data}}, volume = {99}, issn = {0022-3808}, shorttitle = {Poverty and the {Rate} of {Time} {Preference}}, url = {https://www.journals.uchicago.edu/doi/10.1086/261740}, doi = {10.1086/261740}, abstract = {This paper uses the Panel Study of Income Dynamics to study the intertemporal preferences of rich and poor households in the United States. Subjective rates of time preference, identified from estimation of consumption Euler equations, are three to five percentage points higher for households with low permanent incomes than for those with high permanent incomes. Controlling for race and education widens this difference. With age and family composition held constant, time preference rates vary from 12 percent for white, college-educated families in the top 5 percent of the labor income distribution to 19 percent for nonwhite families without a college education whose labor incomes are in the bottom fifth percentile. Such differences imply very different patterns of consumption over the life cycle and suggest one possible explanation for observed heterogeneity in savings behavior across socioeconomic classes.}, number = {1}, urldate = {2025-06-17}, journal = {Journal of Political Economy}, publisher = {The University of Chicago Press}, author = {Lawrance, Emily C.}, month = feb, year = {1991}, pages = {54--77}, } @article{best_estimating_2020, title = {Estimating the {Elasticity} of {Intertemporal} {Substitution} {Using} {Mortgage} {Notches}}, volume = {87}, issn = {0034-6527}, url = {https://doi.org/10.1093/restud/rdz025}, doi = {10.1093/restud/rdz025}, abstract = {Using a novel source of quasi-experimental variation in interest rates, we develop a new approach to estimating the Elasticity of Intertemporal Substitution (EIS). In the U.K., the mortgage interest rate features discrete jumps—notches—at thresholds for the loan-to-value (LTV) ratio. These notches generate large bunching below the critical LTV thresholds and missing mass above them. We develop a dynamic model that links these empirical moments to the underlying structural EIS. The average EIS is small, around 0.1, and quite homogeneous in the population. This finding is robust to structural assumptions and can allow for uncertainty, a wide range of risk preferences, portfolio reallocation, liquidity constraints, present bias, and optimization frictions. Our findings have implications for the numerous calibration studies that rely on larger values of the EIS.}, number = {2}, urldate = {2025-06-17}, journal = {The Review of Economic Studies}, author = {Best, Michael Carlos and Cloyne, James S and Ilzetzki, Ethan and Kleven, Henrik J}, month = mar, year = {2020}, pages = {656--690}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/W2NQB7F4/Best et al. - 2020 - Estimating the Elasticity of Intertemporal Substitution Using Mortgage Notches.pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/EBVTM8MH/5505451.html:text/html}, } @article{hall_intertemporal_1988, title = {Intertemporal {Substitution} in {Consumption}}, volume = {96}, issn = {0022-3808}, url = {https://www.journals.uchicago.edu/doi/10.1086/261539}, doi = {10.1086/261539}, abstract = {One of the important determinants of the response of saving and consumption to the real interest rate is the elasticity of intertemporal substitution. That elasticity can be measured by the response of the rate of change of consumption to changes in the expected real interest rated. A detailed study of data for the twentieth-century United States shows no strong evidence that the elasticity of intertemporal substitution is positive. Earlier findings of substantially positive elasticities are reversed when appropriate estimation methods are used.}, number = {2}, urldate = {2025-06-17}, journal = {Journal of Political Economy}, publisher = {The University of Chicago Press}, author = {Hall, Robert E.}, month = apr, year = {1988}, pages = {339--357}, file = {Submitted Version:/Users/jhall390/Zotero/storage/MI7TTD72/Hall - 1988 - Intertemporal Substitution in Consumption.pdf:application/pdf}, } @article{campbell_household_2006, title = {Household {Finance}}, volume = {61}, copyright = {© 2006 the American Finance Association}, issn = {1540-6261}, url = {https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.2006.00883.x}, doi = {10.1111/j.1540-6261.2006.00883.x}, abstract = {The study of household finance is challenging because household behavior is difficult to measure, and households face constraints not captured by textbook models. Evidence on participation, diversification, and mortgage refinancing suggests that many households invest effectively, but a minority make significant mistakes. This minority appears to be poorer and less well educated than the majority of more successful investors. There is some evidence that households understand their own limitations and avoid financial strategies for which they feel unqualified. Some financial products involve a cross-subsidy from naive to sophisticated households, and this can inhibit welfare-improving financial innovation.}, language = {en}, number = {4}, urldate = {2025-06-17}, journal = {The Journal of Finance}, author = {Campbell, John Y.}, year = {2006}, note = {\_eprint: https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1540-6261.2006.00883.x}, pages = {1553--1604}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/62LJJYR4/Campbell - 2006 - Household Finance.pdf:application/pdf;Snapshot:/Users/jhall390/Zotero/storage/TGV5PKP3/j.1540-6261.2006.00883.html:text/html}, } @article{hausman_individual_1979, title = {Individual {Discount} {Rates} and the {Purchase} and {Utilization} of {Energy}-{Using} {Durables}}, volume = {10}, issn = {0361-915X}, url = {https://www.jstor.org/stable/3003318}, doi = {10.2307/3003318}, abstract = {This article presents a model of individual behavior in the purchase and utilization of energy-using durables. The tradeoff between capital costs for more energy efficient appliances and operating costs for the appliances is emphasized. Using data on both the purchase and utilization of room air conditioners, the model is applied to a sample of households. The utilization equation indicates a relatively low price elasticity. The purchase equation, based on a discrete choice model, demonstrates that individuals do trade off capital costs and expected operating costs. The results also show that individuals use a discount rate of about 20 percent in making the tradeoff decision and that the discount rate varies inversely with income.}, number = {1}, urldate = {2025-09-22}, journal = {The Bell Journal of Economics}, publisher = {[RAND Corporation, Wiley]}, author = {Hausman, Jerry A.}, year = {1979}, pages = {33--54}, } @techreport{ganong_earnings_2025, title = {Earnings {Instability}}, url = {https://www.nber.org/papers/w34227}, doi = {10.3386/w34227}, abstract = {Founded in 1920, the NBER is a private, non-profit, non-partisan organization dedicated to conducting economic research and to disseminating research findings among academics, public policy makers, and business professionals.}, language = {en}, number = {w34227}, urldate = {2025-10-15}, institution = {National Bureau of Economic Research}, author = {Ganong, Peter and Noel, Pascal J. and Patterson, Christina and Vavra, Joseph S. and Weinberg, Alexander}, month = sep, year = {2025}, file = {Full Text PDF:/Users/jhall390/Zotero/storage/IQPFXUDC/Ganong et al. - 2025 - Earnings Instability.pdf:application/pdf}, } @article{jenkins_essays_nodate, title = {{ESSAYS} {ON} {CONSUMER} {CREDIT} {MARKETS}}, abstract = {This dissertation studies the organization of consumer credit markets using a rich and novel dataset from a large subprime auto lender. Its primary goal is to develop empirical methods for analyzing markets with asymmetric information and to use these methods to better understand the behavior of subprime borrowers and lenders. The first chapter quantifies the importance of adverse selection and moral hazard in the subprime auto loan market and shows how different loan contract terms serve to mitigate these distinct information problems. The second chapter examines the impact of centralized credit scoring on lending outcomes, including the distribution of performance across dealerships within the firm. The third chapter studies borrower repayment behavior and quantifies the impact of ex post moral hazard on interest rates and the costs of default. Collectively, the three chapters provide a better understanding of the functioning of markets for subprime credit in the U.S. They also provide unique empirical evidence on the importance of asymmetric information and the value of screening, monitoring, and contract design in consumer credit markets in general.}, language = {en}, author = {Jenkins, Mark William}, file = {PDF:/Users/jhall390/Zotero/storage/4FWGTFMM/Jenkins - ESSAYS ON CONSUMER CREDIT MARKETS.pdf:application/pdf}, } @misc{skiba_payday_2008, address = {Rochester, NY}, type = {{SSRN} {Scholarly} {Paper}}, title = {Payday {Loans}, {Uncertainty} and {Discounting}: {Explaining} {Patterns} of {Borrowing}, {Repayment}, and {Default}}, shorttitle = {Payday {Loans}, {Uncertainty} and {Discounting}}, url = {https://papers.ssrn.com/abstract=1319751}, doi = {10.2139/ssrn.1319751}, abstract = {Ten million American households borrowed on payday loans in 2002. Typically, to receive two weeks of liquidity from these loans households paid annualized (compounded) interest rates over 7000\%. Using an administrative dataset from a payday lender, we seek to explain demand-side behavior in the payday loan market. We estimate a structural dynamic programming model that includes standard features like liquidity constraints and stochastic income, and we also incorporate institutionally realistic payday loans, default opportunities, and generalizations of the discount function. Method of Simulated Moments estimates of the key parameters are identified by two novel pieces of evidence. First, over half of payday borrowers default on a payday loan within one year of their first loans. Second, defaulting borrowers have on average already repaid or serviced five payday loans, making interest payments of 90\% of their original loan's principal. Such costly delay of default, we find, is most consistent with partially naive quasi-hyperbolic discounting, and we statistically reject nested benchmark alternatives.}, language = {en}, urldate = {2025-11-06}, publisher = {Social Science Research Network}, author = {Skiba, Paige Marta and Tobacman, Jeremy}, month = aug, year = {2008}, keywords = {default, hyperbolic discounting, payday lending, payday loan}, } @misc{noauthor_ccdr_paperandappendixpdf_nodate, title = {{CCDR}\_PaperAndAppendix.pdf}, url = {https://drive.google.com/file/d/1RPdiuVy8LUpnLQ4N5jtNIizlPoS_Qw_j/view?usp=share_link&usp=embed_facebook}, urldate = {2026-04-02}, journal = {Google Docs}, file = {Snapshot:/Users/jhall390/Zotero/storage/8CFWTCK7/view.html:text/html}, } @article{rabin_risk_2000, title = {Risk Aversion and Expected-Utility Theory: A Calibration Theorem}, volume = {68}, number = {5}, journal = {Econometrica}, author = {Rabin, Matthew}, year = {2000}, pages = {1281--1292}, } @misc{scf2022, title = {Survey of Consumer Finances}, author = {{Board of Governors of the Federal Reserve System}}, year = {2022}, note = {Public microdata}, } @article{guvenen_empirical_2009, title = {An Empirical Investigation of Labor Income Processes}, author = {Guvenen, Fatih}, journal = {Review of Economic Dynamics}, volume = {12}, number = {1}, pages = {58--79}, year = {2009} } @article{floden_idiosyncratic_2001, title = {Idiosyncratic Risk in the United States and {Sweden}: Is There a Role for Government Insurance?}, author = {Flod{\'e}n, Martin and Lind{\'e}, Jesper}, journal = {Review of Economic Dynamics}, volume = {4}, number = {2}, pages = {406--437}, year = {2001} } @article{storesletten_cyclical_2004, title = {Cyclical Dynamics in Idiosyncratic Labor Market Risk}, author = {Storesletten, Kjetil and Telmer, Christopher I. and Yaron, Amir}, journal = {Journal of Political Economy}, volume = {112}, number = {3}, pages = {695--717}, year = {2004} } @article{blundell_consumption_2008, title = {Consumption Inequality and Partial Insurance}, author = {Blundell, Richard and Pistaferri, Luigi and Preston, Ian}, journal = {American Economic Review}, volume = {98}, number = {5}, pages = {1887--1921}, year = {2008} } @article{avery_overview_2003, title = {An {Overview} of {Consumer} {Data} and {Credit} {Reporting}}, volume = {89}, url = {https://www.federalreserve.gov/pubs/bulletin/2003/0203lead.pdf}, language = {en}, number = {2}, journal = {Federal Reserve Bulletin}, author = {Avery, Robert B. and Calem, Paul S. and Canner, Glenn B. and Bostic, Raphael W.}, month = feb, year = {2003}, pages = {47--73}, } @techreport{lee_introduction_2010, title = {An {Introduction} to the {FRBNY} {Consumer} {Credit} {Panel}}, url = {https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr479.pdf}, language = {en}, number = {479}, institution = {Federal Reserve Bank of New York}, type = {Staff {Report}}, author = {Lee, Donghoon and {van der Klaauw}, Wilbert}, month = nov, year = {2010}, } @book{kellison_theory_2008, title = {The {Theory} of {Interest}}, edition = {3rd}, publisher = {McGraw-Hill/Irwin}, address = {New York}, author = {Kellison, Stephen G.}, year = {2008}, } @misc{cdia_credit_nodate, title = {Credit {Reporting} {Resource} {Guide}}, url = {https://www.cdiaonline.org}, author = {{Consumer Data Industry Association}}, address = {Washington, DC}, note = {Annual publication documenting the Metro 2 credit reporting format}, } @misc{cfpb_regulation_nodate, title = {Truth in {Lending} ({Regulation} {Z})}, author = {{Consumer Financial Protection Bureau}}, note = {12 C.F.R. Part 1026; Appendix J prescribes the actuarial computation of the annual percentage rate}, } @article{argyle_monthly_2020, title = {Monthly {Payment} {Targeting} and the {Demand} for {Maturity}}, volume = {33}, url = {https://academic.oup.com/rfs/article/33/11/5416/5713526}, language = {en}, number = {11}, journal = {The Review of Financial Studies}, author = {Argyle, Bronson S. and Nadauld, Taylor D. and Palmer, Christopher J.}, month = nov, year = {2020}, pages = {5416--5462}, } @article{einav_contract_2012, title = {Contract {Pricing} in {Consumer} {Credit} {Markets}}, volume = {80}, url = {https://onlinelibrary.wiley.com/doi/abs/10.3982/ECTA7677}, doi = {10.3982/ECTA7677}, language = {en}, number = {4}, journal = {Econometrica}, author = {Einav, Liran and Jenkins, Mark and Levin, Jonathan}, year = {2012}, pages = {1387--1432}, } @book{vandervaart_asymptotic_1998, author = {van der Vaart, Aad W.}, title = {Asymptotic Statistics}, publisher = {Cambridge University Press}, address = {Cambridge}, year = {1998} } @article{king_logistic_2001, author = {King, Gary and Zeng, Langche}, title = {Logistic Regression in Rare Events Data}, journal = {Political Analysis}, year = {2001}, volume = {9}, number = {2}, pages = {137--163} } @article{peduzzi_simulation_1996, author = {Peduzzi, Peter and Concato, John and Kemper, Elizabeth and Holford, Theodore R. and Feinstein, Alvan R.}, title = {A Simulation Study of the Number of Events per Variable in Logistic Regression Analysis}, journal = {Journal of Clinical Epidemiology}, year = {1996}, volume = {49}, number = {12}, pages = {1373--1379} } @article{steinbeck_primer_1960, author = {Steinbeck, John}, title = {A Primer on the Thirties}, journal = {Esquire}, month = {June}, year = {1960} } @book{wright_short_2004, author = {Wright, Ronald}, title = {A Short History of Progress}, publisher = {House of Anansi Press}, address = {Toronto}, year = {2004} }