LOCATION

George Washington University School of Business
Duquès Hall, Room 451
2201 G Street NW
(main entrance on 22nd Street between G and H Streets)

Bio: Damon Jones

Damon Jones is an Assistant Professor at the University of Chicago, Harris School of Public Policy. He is also a Faculty Research Fellow at the National Bureau of Economic Research. He completed his Ph.D. in economics at the University of California, Berkeley in 2009. Prior to joining Chicago Harris, he was a postdoctoral fellow at the Stanford Institute for Economic Policy Research. His work focuses on public economics, income taxation, household finance, and behavioral economics.

---

Abstract

We conduct a field experiment designed to test theories of time-inconsistency, namely a “Beta-Delta” model of present bias. The experiment takes place in the context of a saving decision made by low-income tax filers who can deposit their income tax refund into an illiquid account. We find qualitative evidence consistent with present-biased preferences. The tradeoff between an earlier payment or a later one is much more skewed toward taking the early payment when the decision is made on the spot than when the decision is made in advance. We estimate a and of 0.34 and 1.08 over an 8-month horizon, respectively, which translates into an annual discount rate of 164%.