Individual discount rates forecast county-level unemployment change

ABSTRACT

We use a national survey to estimate individuals’ discount rates for job creation in the community and test whether impatience for jobs is associated county-level unemployment change outcomes in subsequent years. Our results suggest that impatience for jobs is a possible forecast variable for future modelling efforts. To explore whether the impatience effect is general or simply limited to attitudes about local job creation, the same survey asked about discount rates for local amenity development and personal financial windfall. We find that job growth discount rates perform best for forecasting.

KEYWORDS:

• Discount rate
• job growth
• unemployment forecast

JEL CLASSIFICATION:

• R11
• R15
• J64

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Survey details: A commercially purchased sample was designed to be representative of English-speaking, non-institutionalized individuals in the United States and consists of a total of 3019 interviews. Responses to a zip code question were matched to community-level characteristics from several secondary data sources. The survey instrument is available upon request.

² We exclude 41 responses with reported discount rates over 100%. Observations with key explanatory variables missing were also omitted from the analysis.

³ The descriptive statistics take into account the sample probability weights.

Additional information

Funding

This research was supported by USDA/CSREES National Research Initiative Competitive [grant number 2005-35401-16000].