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Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Measuring Time Preferences Using Stated Credit Repayment Choices
Author(s): Li, Hanjin
Campbell, Danny
Erdem, Seda
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Keywords: Time preference
Repayment decisions
Choice trajectory
Discount rate
Issue Date: Mar-2022
Date Deposited: 11-Feb-2022
Citation: Li H, Campbell D & Erdem S (2022) Measuring Time Preferences Using Stated Credit Repayment Choices. Journal of Quantitative Economics, 20 (1), pp. 43-67.
Abstract: This paper explores consumers’ repayment decisions and their time preferences. We do this through a hypothetical study using a stated-preference approach. In our experiment, participants are asked to make repayment decisions over time, under different loan sizes. We report five choice trajectories: minimum delay, monotonically decreasing, trajectory with one contradicting choice, trajectory with more than one contradicting choice, and maximum delay. These choice trajectories are taken into account in our modelling approach. Our analysis uses choice models that jointly estimate the discount rate and the probability of choice trajectories. Observed heterogeneity in repayment behaviour is further analysed using sociodemographic factors, and tested for the two loan sizes. We report heterogeneity in consumer repayment decisions, and what happens in the decision-making process for participants in different sociodemographic groups, for different loan sizes. These findings suggest that decision-makers can tailor their strategy for mitigating consumer debts by targeting different groups in the population demonstrating different choice behaviour and decision-making.
DOI Link: 10.1007/s40953-021-00283-7
Rights: This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit
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