Hyperbolic Discounting and COVID-19 Policy Responses

Traditional economic theory assumes that policymakers are rational. However, one bias that policymakers may exhibit is hyperbolic discounting, particularly in health and environmental policy. This paper investigated whether a correlation between hyperbolic discounting and COVID-19 policy responses existed. Results showed that rational discounting and hyperbolic discounting both explain the stringency of policy responses across the world, although this effect was not driven by any specific policies. Further research is needed to determine the mechanism behind the relationship.