DISCOUNTING, COGNITION, AND FINANCIAL AWARENESS: NEW EVIDENCE FROM A CHANGE IN THE MILITARY RETIREMENT SYSTEM

C-Tier
Journal: Economic Inquiry
Year: 2015
Volume: 53
Issue: 1
Pages: 318-334

Score contribution per author:

0.335 = (α=2.01 / 3 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The choice given military personnel between an immediate cash payment of $30,000 or a more generous retirement pension permits us to estimate individuals' personal discount rates (PDRs). The resulting PDRs, about 7% for enlisted personnel and 2%–4.3% for officers, are precise and are correlated with a variety of other financial behaviors. The PDR is negatively related to educational attainment and the Armed Forces Qualification Test, but cognition seems to operate through channels other than being better informed; better‐informed individuals were not always measured to be more patient. (JEL D91, D14)

Technical Details

RePEc Handle
repec:bla:ecinqu:v:53:y:2015:i:1:p:318-334
Journal Field
General
Author Count
3
Added to Database
2026-01-29