Discount rate estimation and the role of time preference in rural household behavior: Disease prevention in India and forest management in the US

This dissertation focuses on a key element of inter-temporal decision-making: time preference - the preference for current, instead of future, utility. This study contributes to the literature by: (i) estimating discount rates among disadvantaged populations: rural households in Maharashtra, India, and limited resource woodland owners in North Carolina; (ii) assessing the requirements and implications of different statistical approaches to analyzing binary-choice stated preference data, by employing four parametric and non-parametric estimation methods, and testing sensitivity to several key methodological choices; (iii) analyzing determinants of the discount rate suggested by theory and empirical studies; and (iv) modeling a wide range of health and forest management behaviors as a function of estimated discount rates, controlling for levels of financial, natural, human, and social capital, and other constraints.;Estimates of the average discount rate in Maharashtra range from 10% to 25% per month, depending on estimation method and length of delay between payments. Age, female gender, wealth, and recent experience with household crisis reduce individual discount rates. In turn, higher discount rates reduce the probability of hand washing and water treatment, but only among those who understand the future benefits of these activities.;The average discount rate of forest landowners in North Carolina is estimated to be much lower: 2% to 9% per year. As in Maharashtra, age is a significant determinant of discount rates in North Carolina, although it is positively rather than negatively associated with the discount rate. Other significant factors include income and number of children. Landowners with higher discount rates are more likely to have harvested timber in the past 10 years.