Subjective discount rates among Israeli Arabs and Israeli Jews

In this study, we compare the subjective discount rate for Israeli Jews and Arabs. All the subjects were bank customers, who were asked to bid and ask prices for delayed fixed amounts and for lotteries. The two populations live in the same country under the same laws. Nevertheless, according to the literature, Israeli Arabs seem to be a discriminated minority, who exhibit traits of a traditional collectivist culture, while Israeli Jews are a majority, who exhibit traits of an individualistic culture. As a discriminated minority, Israeli Arab may suffer from lower trust and as a result, according to the “trust” hypothesis, exhibit higher subjective discount rates and higher risk aversion. On the other hand, according to the “cushion” hypothesis, a collectivist society such as Israeli Arabs, provides a safety net for the individual and as a result, he will exhibit lower subjective discount rates and lower risk-aversion. The experimental findings show that the subjective discount rate and risk aversion of Israeli Arabs are significantly higher than that of Israeli Jews. Moreover, higher percent of Israeli Jews are at the low range of the discount rates (below 10%) and lower percent of Israeli Jews are at the high range of discount rate (above 20%) compared to Israeli Arabs. This is consistent with the “trust” hypothesis. For Israeli Jews, the discount rates are closer to the bank interest rate, while Israeli Arabs rates are much higher particularly for receipt. The dispersion of the distribution of discount rate is much larger for Arabs than for Jews.     

The Group Calibration Index: a group-based approach for assessing forecasters’ expertise when external outcome data are missing

The Group Calibration Index (GCI) provides a means of assessing the quality of forecasters?? predictions in situations that lack external feedback or outcome data. The GCI replaces the missing outcome data with aggregated ratings of a well-defined reference group. A simulation study and two experiments show how the GCI classifies forecaster performance and distinguishes between forecasters with restricted information and those with complete information. The results also show that under certain circumstances, where members of the reference group have high-quality information, the new GCI will outperform expert classification that is based on traditional calibration indices.