Web Appendix for
“Present-Biased Preferences and Credit Card
Borrowing”∗
Stephan Meier†
Charles Sprenger‡
April, 2009
This Web Appendix provides some additional material (tables and instructions)
for the paper “Present-Biased Preferences and Credit Card Borrowing” by
Stephan Meier and Charles Sprenger.
Contents
A Appendix Tables 2
B Instructions of Study 1 (2006) 8
C Instructions of Study 2 (2007) 9
∗
Published in American Economic Journal: Applied Economics.
†
Columbia University, Graduate School of Business, Uris Hall, 3022 Broadway, New York, NY
10027; sm3087@columbia.edu.
‡
University of California at San Diego, Department of Economics, 9500 Gilman Drive, La Jolla,
CA 92093; csprenge@ucsd.edu.
1
A Appendix Tables
The Appendix includes the following additional tables:
• Separate summary statistics for the two years in which the study was undertaken
in Table A1.
• OLS regressions for the paper’s main table in Table A2.
• The association between present-biased preferences and credit card borrowing
conditional on borrowing in Table A3.
• The association between present-biased preferences and credit card borrowing in
natural logarithm conditional on borrowing in Table A4.
• The association between present-biased preferences and credit card borrowing
separately for 2006 and 2007 in Table A5
2
Table A1: Summary Statistics for 2006 and 2007 Sample
(1) (2)
2006 2007
Panel A: Socio-demographic variables
Age 32.2 37.0
(11.5)[123] (13.8)[418]
Gender (Male=1) 0.34 0.36
(0.48)[123] (0.48)[387]
Race (African-American=1) 0.81 0.79
(0.39)[107] (0.40)[384]
College Experience (=1) 0.57 0.50
(0.50)[95] (0.50)[370]
Disposable Income 18712 18459
(12711)[123] (13983)[418]
# of Dependents 0.54 0.51
(0.82)[123] (0.84)[418]
Panel B: Credit behavior
Debt (=1) 0.46 0.39
(0.50)[123] (0.49)[418]
Revolving Balance 1016 1071
(2280)[123] (2455)[418]
Having a Revolving Account (=1) 0.57 0.51
(0.50)[123] (0.50)[418]
Revolving Credit Limit 5462 4559
(14036)[123] (11136)[418]
FICO Score 618 607
(83)[93] (84)[297]
Panel C: Time preferences
IDF 0.89 0.81
(0.13)[123] (0.20)[418]
Present Bias (=1) 0.34 0.36
(0.48)[123] (0.48)[418]
Future Bias (=1) 0.17 0.06
(0.38)[123] (0.25)[418]
Notes: Summary statistics for participants who exhibited unique switching
points in the choice experiments in 2006 and 2007 separately.
3
Table A2: Present-Biased Preferences and Credit Card Borrowing (OLS Regressions)
(1) (2) (3) (4) (5) (6)
IDF 194.4 275.0 -148.8 1055.3 -333.5 -252.4
(423.6) (454.1) (456.7) (2021.5) (359.8) (440.2)
Present Bias (=1) 771.0*** 902.3*** 950.4*** 1819.9** 885.3*** 1010.9***
(252.2) (260.0) (262.7) (784.9) (196.9) (250.7)
Future Bias (=1) -72.9 60.2 -107.1 -185.4 -119.4 -179.1
(343.1) (345.7) (341.3) (647.1) (294.7) (325.8)
Constant & Year of Study Yes Yes Yes Yes Yes Yes
Exogenous Control Variables No Yes Yes Yes Yes Yes
Other Socio-Demographics No No Yes Yes Yes Yes
Credit Card Information No No No No Yes No
FICO Score Information No No No No No Yes
Mean of DV for Reference Group (Present Bias (=0) and Future Bias (=0)):
786.8 786.8 786.8 1053.6 786.8 786.8
R2
0.025 0.063 0.097 0.163 0.446 0.193
N 541 541 541 122 541 541
Note: Dependent variable: Outstanding balance on revolving accounts. In column (4), the dependent variable
is the outstanding balance on revolving accounts one year after the experiment for the 2006 sample. Coefficient
of OLS regressions. Robust standard errors in parentheses. Exogenous Control Variables: age, gender, race, and
dummies for missing values. Other Socio-Demographics: ln(disposable income), number of dependents, college
experience, and a dummy for missing information for education. Credit Card Information: dummy for having a
revolving account and ln(Credit Limit). FICO Score Information: FICO score and a dummy for missing score.
Level of significance: *p < 0.1, **p < 0.05, ***p < 0.01
4
Table A3: Present-Biased Preferences and Credit Card Borrowing (Conditional on Borrow-
ing)
(1) (2) (3) (4) (5)
IDF -827.7 -360.4 -412.6 -191.7 -615.3
(937.2) (958.6) (963.3) (884.0) (1024.9)
Present Bias (=1) 1496.8*** 1716.1*** 1649.0*** 1712.6*** 1688.8***
(483.6) (498.7) (506.0) (433.3) (511.6)
Future Bias (=1) -39.7 88.3 -180.0 -144.4 -195.1
(791.5) (683.7) (676.7) (660.3) (681.5)
Constant & Year of Study Yes Yes Yes Yes Yes
Exogenous Control Variables No Yes Yes Yes Yes
Other Socio-Demographics No No Yes Yes Yes
Credit Card Information No No No Yes No
FICO Score Information No No No No Yes
Mean of DV for Reference Group (Present Bias (=0) and Future Bias (=0)):
2028.1 2028.1 2028.1 2028.1 2028.1
R2
0.058 0.126 0.1547 0.366 0.168
N 221 221 221 221 221
Note: Dependent variable: Outstanding balance on revolving accounts. Coefficient of OLS regressions.
Robust standard errors in parentheses. Exogenous Control Variables: age, gender, race, and dummies
for missing values. Other Socio-Demographics: ln(disposable income), number of dependents, college
experience, and a dummy for missing information for education. Credit Card Information: dummy for
having a revolving account and ln(Credit Limit). FICO Score Information: FICO score and a dummy
for missing score.
Level of significance: *p < 0.1, **p < 0.05, ***p < 0.01
5
Table A4: Present-Biased Preferences and Ln(Credit Card Borrowing)
(Conditional on Borrowing)
(1) (2) (3) (4) (5)
IDF -0.5 -0.3 -0.4 -0.2 -0.2
(0.5) (0.6) (0.5) (0.5) (0.6)
Present Bias (=1) 0.4* 0.5** 0.5** 0.5*** 0.5**
(0.2) (0.2) (0.2) (0.2) (0.2)
Future Bias(=1) -0.2 -0.2 -0.3 -0.3 -0.3
(0.4) (0.3) (0.4) (0.4) (0.4)
Constant & Year of Study Yes Yes Yes Yes Yes
Exogenous Control Variables No Yes Yes Yes Yes
Other Socio-Demographics No No Yes Yes Yes
Credit Card Information No No No Yes No
FICO Score Information No No No No Yes
R2
0.028 0.091 0.127 0.300 0.136
N 221 221 221 221 221
Note: Dependent variable: Ln(Outstanding balance on revolving accounts).
Coefficient of OLS regressions. Robust standard errors in parentheses. Exogenous
Control Variables: age, gender, race, and dummies for missing values.
Other Socio-Demographics: ln(disposable income), number of dependents, college
experience, and a dummy for missing information for education. Credit
Card Information: dummy for having a revolving account and ln(Credit Limit).
FICO Score Information: FICO score and a dummy for missing score.
Level of significance: *p < 0.1, **p < 0.05, ***p < 0.01
6
Table A5: Present-Biased Preferences and Credit Card Borrowing
(1) (2) (3) (4) (5)
Panel A: 2006 Sample
IDF 605.3 760.1 119.9 -1349.6 -283.4
(2937.5) (2994.4) (2976.8) (2024.3) (2930.8)
Present Bias (=1) 1638.0 1649.1* 2371.6** 2074.6** 2527.5***
(997.4) (983.7) (1044.5) (831.8) (923.5)
Future Bias (=1) -1128.5 -974.2 -1103.1 -1186.3 -1154.4
(1029.7) (1063.9) (1125.3) (870.1) (986.4)
N 123 123 123 123 123
Panel B: 2007 Sample
IDF 1836.7 1880.5 681.6 590.5 897.1
(1304.3) (1315.3) (1319.7) (930.3) (1216.3)
Present Bias (=1) 1146.4* 1521.7** 1618.0*** 1823.2*** 1952.0***
(601.3) (614.0) (619.3) (490.3) (592.3)
Future Bias(=1) 386.9 614.1 182.0 89.9 54.9
(1141.5) (1109.2) (1079.0) (867.3) (1009.4)
N 418 418 418 418 418
Constant & Year of Study Yes Yes Yes Yes Yes
Exogenous Control Variables No Yes Yes Yes Yes
Other Socio-Demographics No No Yes Yes Yes
Credit Card Information No No No Yes No
FICO Score Information No No No No Yes
Note: Dependent variable: Outstanding balance on revolving accounts. Coefficient of tobit regressions.
Robust standard errors in parentheses. Exogenous Control Variables: age, gender, race, and
dummies for missing values. Other Socio-Demographics: ln(disposable income), number of dependents,
college experience, and a dummy for missing information for education. Credit Card Information:
dummy for having a revolving account and ln(Credit Limit). FICO Score Information: FICO
score and a dummy for missing score.
Level of significance: *p < 0.1, **p < 0.05, ***p < 0.01
7
B Instructions of Study 1 (2006)
Please indicate for each of the following 19 decisions, whether you would prefer the smaller payment
in the near future or the bigger payment later. The number of your raffle ticket (none or 1 to 19), will
indicate which decision you will be paid, if at all.
[Block 1; t = 0, τ = 1]: Option A (TODAY) or Option B (IN A MONTH)
Decision (1): $ 75 guaranteed today - $ 80 guaranteed in a month
Decision (2): $ 70 guaranteed today - $ 80 guaranteed in a month
Decision (3): $ 65 guaranteed today - $ 80 guaranteed in a month
Decision (4): $ 60 guaranteed today - $ 80 guaranteed in a month
Decision (5): $ 50 guaranteed today - $ 80 guaranteed in a month
Decision (6): $ 40 guaranteed today - $ 80 guaranteed in a month
[Block 2; t = 0, τ = 6]: Option A (TODAY) or Option B (IN 6 MONTHS)
Decision (7): $ 75 guaranteed today - $ 80 guaranteed in 6 months
Decision (8): $ 70 guaranteed today - $ 80 guaranteed in 6 months
Decision (9): $ 65 guaranteed today - $ 80 guaranteed in 6 months
Decision (10): $ 60 guaranteed today - $ 80 guaranteed in 6 months
Decision (11): $ 50 guaranteed today - $ 80 guaranteed in 6 months
Decision (12): $ 40 guaranteed today - $ 80 guaranteed in 6 months
Decision (13): $ 30 guaranteed today - $ 80 guaranteed in 6 months
[Block 3; t = 6, τ = 7]: Option A (IN 6 MONTHS) or Option B (IN 7 MONTHS)
Decision (14): $ 75 guaranteed in 6 months - $ 80 guaranteed in 7 months
Decision (15): $ 70 guaranteed in 6 months - $ 80 guaranteed in 7 months
Decision (16): $ 65 guaranteed in 6 months - $ 80 guaranteed in 7 months
Decision (17): $ 60 guaranteed in 6 months - $ 80 guaranteed in 7 months
Decision (18): $ 50 guaranteed in 6 months - $ 80 guaranteed in 7 months
Decision (19): $ 40 guaranteed in 6 months - $ 80 guaranteed in 7 months
8
C Instructions of Study 2 (2007)
As a tax filer at this Volunteer Income Tax Assistance site you are automatically entered in a raffle
in which you could win up to $50. Just follow the directions below:
How It Works: In the boxes below you are asked to choose between smaller payments closer to
today and larger payments further in the future. For each row, choose one payment: either the smaller,
sooner payment or the later, larger payment. When you return this completed form, you will receive
a raffle ticket. If you are a winner, the raffle ticket will have a number on it from 1 to 22. These
numbers correspond to the numbered choices below. You will be paid your chosen payment. The
choices you make could mean a difference in payment of more than $35, so CHOOSE CAREFULLY!!!
RED BLOCK (Numbers 1 through 7): Decide between payment today and payment in one month
BLACK BLOCK (Numbers 8 through 15): Decide between payment today and payment in six
months
BLUE BLOCK (Numbers 16 through 22): Decide between payment in six months and payment in
seven months
Rules and Eligibility: For each possible number below, state whether you would like the earlier,
smaller payment or the later, larger payment. Only completed raffle forms are eligible for the raffle.
All prizes will be sent to you by normal mail and will be paid by money order. One out of ten raffle
tickets will be a winner. You can obtain your raffle ticket as soon as your tax filing is complete. You
may not participate in the raffle if you are associated with the EITC campaign (volunteer, business
associate, etc.) or an employee (or relative of an employee) of the Federal Reserve Bank of Boston or
the Federal Reserve System.
[Red Block; t = 0, τ = 1]
TODAY VS. ONE MONTH FROM TODAY WHAT WILL YOU DO IF YOU GET A NUMBER
BETWEEN 1 AND 7? Decide for each possible number if you would like the smaller payment for
sure today or the larger payment for sure in one month? Please answer for each possible number
(1) through (7) by filling in one box for each possible number.
Example: If you prefer $49 today in Question 1 mark as follows: $49 today or $50 in one month
If you prefer $50 in one month in Question 1, mark as follows: $49 today or $50 in one month
If you get number (1): Would you like to receive $49 today or $50 in one month
If you get number (2): Would you like to receive $47 today or $50 in one month
If you get number (3): Would you like to receive $44 today or $50 in one month
If you get number (4): Would you like to receive $40 today or $50 in one month
If you get number (5): Would you like to receive $35 today or $50 in one month
If you get number (6): Would you like to receive $29 today or $50 in one month
If you get number (7): Would you like to receive $22 today or $50 in one month
[Black Block; t = 0, τ = 6]
TODAY VS. SIX MONTHS FROM TODAY WHAT WILL YOU DO IF YOU GET A NUMBER
BETWEEN 8 AND 15? Now, decide for each possible number if you would like the smaller payment
for sure today or the larger payment for sure in six months? Please answer each possible number
(8) through (15) by filling in one box for each possible number.
If you get number (8): Would you like to receive $49 today or $50 in six months
If you get number (9): Would you like to receive $47 today or $50 in six months
If you get number (10): Would you like to receive $44 today or $50 in six months
If you get number (11): Would you like to receive $40 today or $50 in six months
If you get number (12): Would you like to receive $35 today or $50 in six months
If you get number (13): Would you like to receive $29 today or $50 in six months
If you get number (14): Would you like to receive $22 today or $50 in six months
If you get number (15): Would you like to receive $14 today or $50 in six months
9
[Blue Block; t = 6, τ = 7]
SIX MONTHS FROM TODAY VS. SEVEN MONTHS FROM TODAY WHAT WILL YOU DO IF
YOU GET A NUMBER BETWEEN 16 AND 22? Decide for each possible number if you would
like the smaller payment for sure in six months or the larger payment for sure in seven months?
Please answer for each possible number (16) through (22) by filling in one box for each possible
number.
If you get number (16): Would you like to receive $49 in six months or $50 in seven months
If you get number (17): Would you like to receive $47 in six months or $50 in seven months
If you get number (18): Would you like to receive $44 in six months or $50 in seven months
If you get number (19): Would you like to receive $40 in six months or $50 in seven months
If you get number (20): Would you like to receive $35 in six months or $50 in seven months
If you get number (21): Would you like to receive $29 in six months or $50 in seven months
If you get number (22): Would you like to receive $22 in six months or $50 in seven months
10