Present-bias in different income groups

The excessive use of credit cards and increasing consumer borrowing has been a major problem.
Laibson (1997) suggests the present-bias problem as one of the driving forces of excessive borrowing. Shefrin and Thaler (1988) suggest that self-control underlies national borrowing/savings
rate. We conduct a survey to check for present-bias as well as self-control problems among individuals in Turkey. Our findings show that different income groups have similar discount factors,
i.e., impatience levels, but very different degrees of dynamic inconsistencies, i.e. present-bias
levels. In particular, 29.4% of low-income individuals exhibit present-bias whereas this is down
to 6.4% for high-income individuals. Using the parameters we achieve through the surveys,
policymakers can design appropriate commitment devices for time-inconsistent individuals to
ensure a sustainable level of aggregate saving and financial investment.