Analysing the Relationship Between Personal Time Discounting Factors and Risk Related Behaviour

Abstract

Time discounting factors represent a widely-discussed subject in economics. Several methods are employed in order to collect data on discounting behavior; one of the most popular, also used in this article, is Kirby's Monetary Choice Questionnaire (MCQ). The binary responses in the questionnaire are then processed in order to estimate the k parameters of delay discounting. Two methods of estimation are compared and evaluated – Kaplan's Autoscorer and Wileyto's Logistic Regression Model. Rohrmann's Risk Orientation Questionnaire uses participants' responses to quantify the manifestation of risk related behaviors. In the final analysis of this article, the logistic regression estimates of k and the risk orientation factors are taken into consideration, together with demographic variables, to check for correlations and trends. There were no significant links found between risk orientation and time-discounting. However, there were several significant results at demographic level – for example, a positive correlation of 0.166 between risk aversion and income level during childhood (p = 0.02).