Discounting and Defaulting: Evidence from Time Preference Experiments and Administrative Credit Data

debt-clipart-aTeK6aRqcThis paper was presented by Stephan Meier and Charles Sprenger at the Family Financial Security Symposium in April, 2010.  If defaulting is a decision in which consumers weigh the present benefits of not having to repay their debts against the future costs of potentially being excluded from financial markets or stigmatized, individual time preferences should be a key determinant of defaulting.  This paper links experimentally measured differences in time preferences to objectively measured differences in defaulting behavior.

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Family Financial Security Symposium

2010symposiumDate: April 19 and 20, 2010

Description: The CFS convened researchers, practitioners and policymakers to explore challenges and opportunities in consumers’ financial literacy and stability. The event, “Family Financial Security: Implications for Policy and Practice,” introduced some of the most recent and cutting-edge studies that bring new insights into economic behavior.

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