Économie et Statistique n° 374-375 - 2004Savers' Preferences and Accumulation of Personal Wealth
Measuring individual risk-related preferences
Microeconomic theory makes a saver's choices dependent on the lifecycle of his discount rate, or on the subjective discount rate he uses to anticipate his future gratifications. The higher this rate, the lower the savings level. This time preference, characteristic of the agent's life expectancy, needs to be differentiated from the parameters that govern his decisions as regards other timeframes: his extent of shorter-run impatience, but also his intergenerational altruism. Just as the discount rate compares a deferred gratification with gratification today, the extent of altruism indicates the relative weight placed on the welfare of one's children or the welfare of future generations compared with one's own welfare. A specific questionnaire has been put to a sub-sample of the 1998 INSEE Patrimoine survey on personal wealth to evaluate these individual preferences. To avoid the problems encountered by previous measurement attempts, the questionnaire contains the usual choices between pleasures assumed equivalent on different dates -, but also puts a range of simpler and more concrete questions seeking to better identify what the time preference really represents in terms of decision-making period and «life plans». By covering a large number of areas and situations, we hope to limit context effects and better control the other factors involved in intertemporal choices: interest rates, attitude to risk under a necessarily uncertain future, liquidity constraints, etc. The discount rate, impatience and extents of altruism family and non-family related are then evaluated by scores, ordinal measures that summarise the interviewee's responses to all the questions attributed to each preference. Who is provident low short-run time preference impatient or altruistic? The explanatory regressions on the different scores generally produce the expected findings. Time preference appears to be transmitted through the mother.