The discount factor is based on behavior in the choice game. The game was described to subjects as follows: “Two prizes will be awarded in class at the conclusion of this study. If you are chosen to receive the second prize7, your answers to the following series of questions will determine the amount of the award and the date of payment. You will be asked to choose the payment option that you would prefer in each of 20 different payoff alternatives. Note that each of the 20 payoff alternatives will pay $100 in 30 days (option A) or $100 + $x in 60 days (option B), where x differs under each payoff alternative. For each payoff alternative you will select the payment option (A or B) that you would prefer if you are chosen to receive the prize. When the study is completed, a random drawing will be held in class to choose which one of the 20 payoff alternatives will determine the prize and another random drawing will be held to determine the one person who will receive the second prize. When and how much the winner will be paid will be based on the payment option he or she chooses under the payoff alternative selected.
“In the table of alternatives there is a column labeled “Annual Interest Rate.” This is the interest rate required on the initial balance of $100 (option A) that would yield the amount in option B, after accounting for the fact that interest is compounded daily on the initial balance. For comparison, most banks are currently paying 1%–2% interest on savings accounts or certificates of deposits. Most credit card companies are charging college students 12%–16% interest to borrow money. Thus, you have an opportunity to earn money at much higher rates of interest in this study. Below is the table of the payment options for the 20 different alternatives. For payoff alternative 1, would you prefer option A ($100 in 30 days) or option B ($100.17 in 60 days)?” Subjects were asked to make choices over twenty sets of alternatives. Table A1 shows each set of alternatives as they were displayed to the subjects.
Choices available to subjects
Political information is the number of correct answers to the following 8 multiple choice and open answer questions. “Which party currently has the most members in the House of Representatives in Washington?” (Republican/Democrat) “Which party currently has the most members in the Senate in Washington?” (Republican/Democrat) “Who has the final responsibility to decide if a law is constitutional or not?” (President/Congress/Supreme Court) “Whose responsibility is it to nominate judges to the Federal Courts?” (President/Congress/Supreme Court) “What is the job held by William Rehnquist?” “What is the job held by Tony Blair?” “What is the job held by John Ashcroft?” “What is the job held by Bill Frist?”
Reads the News and Watches the News were based on answers to these two questions: “During the past week, about how many days did you read a daily newspaper (other than the CALIFORNIA AGGIE) or consult an online news source?” and “During the past week, about how many days did you watch a national network news program on television?”
Parents’ Income is the answer to: “Please choose the category that describes the total amount of INCOME earned in 2003 by your PARENTS or GUARDIANS. Consider all forms of income, including salaries, tips, interest and dividend payments, scholarship support, student loans, parental support, social security, alimony, and child support, and others.” (1 = $15,000 or under, 2 = $15,001–$25,000, 3 = $25,001–$35,000, 4 = $35,001–$50,000, 5 = $50,001–$65,000, 6 = $65,001–$80,000, 7 = $80,001–$100,000, 8 = over $100,000). Parents’ Education is the average for both parents on “What was the highest level of education that your father [mother] (or male [female] guardian) completed?” 1 = Less than high school, 2 = High school diploma, 3 = Vocational School, 4 = Attended College, 5 = Bachelor’s, 6 = Graduate School.
For external efficacy, we follow Craig, Niemi, and Silver (1990) and Niemi, Craig, and Mattei (1991) by creating an index that sums responses from four questions: “People like me don’t have any say about what the government does”, “I don’t think public officials care much what people like me think”, “How much do you feel that having elections makes the government pay attention to what the people think?”, and “Over the years, how much attention do you feel the government pays to what the people think when it decides what to do?”. The first two questions are coded 0 = agree, 0.5 = neither, and 1 = disagree. The third and fourth questions are coded 1 = a good deal, 0.5 = some, and 0 = not much.
For the remaining variables, we follow the coding procedure in Timpone (1998
) and the question wording used in the NES. Age is in number of years. Church attendance is an index of religious attendance, 1 = never/no religious preference, 2 = a few times a year, 3 = once or twice a month, 4 = almost every week, and 5 = every week. Internal efficacy is a binary response (0 = true, 1 = false) to the question “Sometimes politics and government seem so complicated that a person like me can’t really understand what’s going on.” Strength of party identification is coded 1 = independents and apoliticals, 2 = independents leaning towards a party, 3 = weak partisans, and 4 = strong partisans. Civic duty is coded 1 = agree strongly, 2 = agree somewhat, 3 = neither, 4 = disagree somewhat, and 5 = disagree strongly for “If a person doesn’t care how an election comes out he shouldn’t vote in it.” Female is 1 for female, 0 for male. Nonwhite is 1 for nonwhite, 0 for white. Interest in Politics is the answer to the question “Some people don’t pay much attention to political campaigns. How interested are you in the 2004 presidential election campaign?” (1 = not much interested, 2 = somewhat interested, 3 = very much interested).
Pearson correlation matrix