Nber Working Paper Series Individual Laboratory-measured Discount Rates Predict Field Behavior

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. Christopher F. Chabris Department of Psychology Union College 807 Union Street Schenectady, NY 12308 [email protected] David Laibson Department of Economics Littauer M-12 Harvard University Cambridge, MA 02138 and NBER [email protected] Carrie L. Morris Washington University School of Medicine Campus Box 8505 4444 Forest Park Avenue Campus Box St. Louis, MO 63108 [email protected] Jonathon P. Schuldt Department of Psychology University of Michigan 3232 East Hall 530 Church St. Ann Arbor, MI 48109 [email protected] Dmitry Taubinsky Harvard University Kirkland House Cambridge, MA 02138 [email protected]