Published January 2010
| Published + Submitted + Supplemental Material
Journal Article
Open
Present-Biased Preferences and Credit Card Borrowing
- Creators
- Meier, Stephan
- Sprenger, Charles
Chicago
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Abstract
Some individuals borrow extensively on their credit cards. This paper tests whether present-biased time preferences correlate with credit card borrowing. In a field study, we elicit individual time preferences with incentivized choice experiments, and match resulting time preference measures to individual credit reports and annual tax returns. The results indicate that present-biased individuals are more likely to have credit card debt, and to have significantly higher amounts of credit card debt, controlling for disposable income, other socio-demographics, and credit constraints.
Additional Information
© 2010 American Economic Association. This paper is a substantial revision of the previous paper entitled: "Impatience and Credit Behavior: Evidence from a Field Experiment." We are grateful to two anonymous referees, Christine Benesch, Mary Burke, Jeff Carpenter, Vince Crawford, Jonathan Crook, Chris Foote, Andreas Fuster, Kris Gerardi, Lorenz Goette, Glenn Harrison, David Huffman, Elif Incekara, Cathleen Johnson, Jane Katz, David Laibson, Borja Larrain, Felix Oberholzer-Gee, Jan Potters, Tanya Rosenblat, Julio Rotemberg, Jeremy Tobacman, Tyler Williams, and participants at seminars and conferences at Columbia University, the Dutch National bank, the European University Institute, the Federal Reserve Bank of Boston, the Federal Trade Commission, the University of Arizona, the University of Lausanne, the University of Texas at Dallas, and the University of Zurich for helpful comments. This research was undertaken while both authors were at the Federal Reserve Bank of Boston. Special thanks to Marques Benton (Department of Public and Community Affairs) for his help. The views expressed herein are solely those of the authors and not necessarily those of the Federal Reserve System or the Federal Reserve Bank of Boston.Attached Files
Published - app.2.1.193.pdf
Submitted - 605349959.pdf
Supplemental Material - 2009-0079_app.pdf
Files
605349959.pdf
Additional details
- Eprint ID
- 104491
- Resolver ID
- CaltechAUTHORS:20200721-150526905
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2020-07-22Created from EPrint's datestamp field
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2021-11-16Created from EPrint's last_modified field