Work in progress
Multi-attribute Elicitation of Time Preference (with Emmanouil Mentzakis)
Abstract: Many of the decisions we make as economic agents involve choices that play out over time. The literature on intertemporal preferences in the past three decades has accumulated a substantial array of evidence of the existence of so called discounting anomalies (Frederick, Loewenstein, and O’Donoghue (2002)). The approach that is usually taken to investigate these anomalies has been to apply a standard smaller sooner – larger later experimental format and varying one anomaly at a time. This paper explores the relationships between the discounting anomalies themselves by adapting a discrete choice experiment in order to elicit them simultaneously. It finds that the various anomalies are highly interacted, suggesting that their effect on utility is dependent on each other. This suggests that multi-attribute elicitation of such anomalies may provide further insight into their impact on discounting behaviour.
Experimental evidence on the effect of incentives and domain in risk aversion and discounting tasks (with Emmanouil Mentzakis) Journal of Risk and Uncertainty 2021, 62: 203–224
Abstract: Environmental policy evaluation is often criticised for employing discount rates that have little grounding in research. Yet, experimental research aimed at eliciting realistic rates will inevitably require strong assumptions of external validity, while also placing large cognitive demands on subjects by processing tasks of increased unfamiliarity. We use a controlled lab experiment to test the impact of incentives on risk aversion and discounting tasks for monetary and environmental goods. We find that, on average, incentives have little effect on risk aversion or discounting tasks in either domain. Exploring heterogeneity by treatment and socio-demographics some significant patterns emerge. Further, contrary to past work, we find evidence of domain (monetary vs. environmental good) effects in both risk and discounting.
Time Preference and Risk Aversion: Tests on Domain Differences (with Christos Ioannou)
Journal of Risk and Uncertainty 2016, 53, (1): 29-54
Abstract: Understanding how individuals discount and evaluate the risks of environmental outcomes is a prime component in designing effective environmental policy. We use an incentivized experimental design to investigate whether subjects’ time preferences and risk aversion across the monetary and the environmental domain differ. We find that subjects’ time preferences are not significantly different across the two domains. In contrast, subjects exhibit a higher degree of risk aversion in the environmental domain. Finally, we corroborate earlier results, documenting that women are more risk averse than men in the monetary domain, and show this finding to also hold in the environmental domain.
Why Give Away Your Wealth? An Analysis of the Billionaires’ View (with Mirco Tonin and Michael Vlassopoulos)
Chapter in: “Social Economics”, edited by J. Costa-Font and M. Macis, MIT press, 2015
Abstract: We explore what motivates the philanthropic activity of extremely wealthy individuals and families. We focus on a recent large-scale philanthropic initiative by billionaires, the Giving Pledge, a commitment to donating half or more of one’s wealth. We perform two pieces of analysis: first, we investigate what personal characteristics of billionaires are associated with becoming a pledger. Second, we undertake a textual analysis of the pledgers’ letters describing their philanthropic outlook and classify their motivation into ten categories. We then correlate these motivational categories with various personal characteristics of the pledgers. The main insights obtained from our analysis are that pledgers are more likely to be self-made billionaires, and that their philanthropy is impact-driven.
Heterogeneities in Time Discounting Preferences of Environmental Projects: Some Experimental Results
Bank of Valletta Review
Abstract: The issue of discounting environmental projects is a contentious one, with individuals from different fields holding very strong, and often opposing opinions about the matter. Even within the field of economics there is a lack of consensus on what is an appropriate discount rate, with a number of prominent economists believing that environmental projects should not be treated any different from private investment projects when it comes to discounting. Using an innovative experimental methodology developed by the author, this study pilots an approach which shows that the intertemporal preferences of individuals vary not only between private and environmental projects but, equally importantly, between different groups of people. These findings reinforce the need to use a specific discount rate for assessing environmental projects which is properly representative of heterogeneities in social preferences in this regard.
Presentation at envecon 2016 on Time preferences and risk aversion: Tests on domain differences.