Heterogeneity in Time Preferences for an Investment in Irrigation.

We use a random time parameter bivariate probit to estimate individual time preferences using exponential and hyperbolic discounting forms for agricultural producers making an irrigation investment. The standard deviation estimate of the random time parameter suggests that there is substantial unobserved heterogeneity in time preferences across farmers. We control for time preference heterogeneity by making the time parameter a function of farm and personal characteristics. Using multiple irrigation techniques correlates with producers who are less patient for the investment. Education or participation in a government cost-share program for a similar irrigation investment correlates with greater patience by producers. (JEL Q25, D92)