ECON 440: Lecture 8 - Introduction to time preferences

What is a likely demand-related factor contributing to the decline in drug overdose deaths?

Which method is suggested for learning about cost-effective ways to decrease drug overdose deaths?

In the context of time preferences, what does a preference for $100 today over $90 one year from now indicate?

What is one potential supply-side explanation for the decline in drug overdose deaths?

Which factor might indicate a decline in the drug user population?

What is the utility function U(c) dependent on according to the content?

Which of the following choices would indicate a perfectly patient individual in terms of time preferences?

What impact does carrying overdose-reversal medication have on drug users?

What is a key characteristic of the Standard Model of Exponential Discounting?

Which of these is a limitation when analyzing causes of the decline in drug overdose deaths?

Decline in drug overdose deaths

Drug overdose death rates have decreased, but the reasons are unclear.
Potential explanations include:
- Decreasing demand for drugs like fentanyl, methamphetamine, xylazine, and other synthetic chemicals.
- Increased law enforcement efforts at the border.
- Gangs mixing xylazine with fentanyl, which delays withdrawal onset.
- Drug users becoming more likely to carry overdose reversal medication (naloxone).
- A decline in the population of drug users.
It is crucial to understand the causes of the decrease to allocate resources effectively.
Confounding explanations exist; causality is difficult to determine.
Experimental methods can help identify cost-effective ways to reduce drug overdose deaths.

Time Preferences

Individuals exhibit different preferences for receiving goods or services at different points in time.
Individuals who value present goods more than future goods are considered impatient.
Exponential discounting is a standard model used to represent time preferences.
Consumption over time is represented as a sequence of consumption (or wealth or income) over a specific time period.
Utility is a function of the entire consumption stream, reflecting the total satisfaction from consumption over time.

Explore the recent trends in drug overdose death rates and the complex factors behind their decline. This quiz also addresses time preferences, highlighting how individuals prioritize immediate rewards over future ones. Gain insights into the interplay between drug trends and personal decision-making.