On the Appropriate Measure to Estimate Hyperbolic Discounting Rate () using the Method of Least Squares.

The estimation of the rate at which value declines with delay requires identifying the correct discounting model, applying the appropriate parameter estimation method, and choosing the dependent measure from which parameters are estimated. The simplest adequate discounting model is the hyperbolic model; the simplest method to estimate its sole free parameter, , is the method of least squares. Estimates of based on relative subjective values (RSV), although typical, are not necessarily more reliable than those obtained through other measures.