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Extensions / Renewal (Kimball, Sahm, Shapiro)

Extensions / Renewal (Kimball, Sahm, Shapiro). Refine and analyze data on IES, time preference, and risk tolerance Improve instrument and output delivery Estimate statistical model Measure complementary parameters Diminishing marginal utility Labor supply elasticities

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Extensions / Renewal (Kimball, Sahm, Shapiro)

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  1. Extensions / Renewal (Kimball, Sahm, Shapiro) • Refine and analyze data on IES, time preference, and risk tolerance • Improve instrument and output delivery • Estimate statistical model • Measure complementary parameters • Diminishing marginal utility • Labor supply elasticities • Retirement elasticity

  2. Renewal: Survey Measurement of Preference Parameters (KSS) 2 Big HRS Topics: Wealth, Labor Supply • Preference parameters for wealth • risk tolerance • time preference/intertemporal substitution • bequest motive (intergenerational altruism) • Preference parameters for labor supply • income, substitution, and long-run labor supply elasticities, • retirement elasticities

  3. Scientific Significance 1. Kimball-Shapiro finding of large income elasticities of labor supply on HRS data raises many questions • Are substitution elasticities, measured directly, also large? • Is the long-run labor supply elasticity, in fact, zero? • What is the dose-response mapping? • How large is the retirement elasticity?

  4. Scientific Significance (cont.) 2. Labor supply elasticities are linked to the elasticities that matter for wealth • Raj Chetty links risk aversion to the long-run labor supply elasticity • Basu and Kimball emphasize the link between the long-run labor supply elasticity and intertemporal substitution. 3. The elasticities that matter for wealth are theoretically linked to one another (U’’).

  5. Proposal for KSS piece of the Renewal • Continue to develop web-based measures of time-preference/intertemporal substitution, including ways of getting at habit formation. • Compare time-preference/intertemporal substitution measures to other measures related to U’’ and to labor supply elasticity measures. • Measure the retirement elasticity, test dose-response relationships for labor supply and compare measures of income, substitution and long-run elasticities (yielding over-identification)

  6. Happiness (KW) • Add a simple happiness measure to the web survey • inexpensive: ≈40 seconds of survey time • extends the SCA panel data on happiness • relevant to other data on the web survey • Comparisons of hypothetical choices with predicted impact effects on happiness • Test of theoretical prediction • Valuable survey method for some choices?

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