Smokers, smoking deprivation, and time discounting

•We conduct an experiment on nicotine and time discounting.•We compare non-smokers, nicotine-deprived smokers, and non-deprived smokers.•Incentives include tobacco that is actually smoked during the experiment.•Smokers are more impatient, but deprived smokers are even more impatient.•Nicotine has different short-run and long-run effects on time discounting.

This paper investigates whether smokers exhibit greater time discounting than non-smokers, and how short-term nicotine deprivation affects time discounting. A unique feature of our experiment is that our subjects receive rewards not only of money, but also of actual tobacco. This is done in order to elicit smokers’ true preferences. Smokers are more impatient than non-smokers, consistent with previous studies. Additionally, nicotine deprivation makes smokers even more impatient. These results suggest that nicotine concentration has different effects on time preferences in the short and long runs.