Discounting, beyond utilitarianism

Marc Fleurbaey and Stéphane Zuber

No 2014-40, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Discounted utilitarianism and the Ramsey equation prevail in the debate on the discount rate on consumption. The utility discount rate is assumed to be constant and to reflect either the uncertainty about the existence of future generations or a pure preference for the present. The authors question the unique status of discounted utilitarianism and discuss the implications of alternative criteria addressing the key issues of equity in risky situations and variable population. To do so, they introduce a class of intertemporal social objectives, named Expected Prioritarian Equally Distributed Equivalent (EPEDE) criteria. The class is more flexible than Discounted utilitarianism in terms of population ethics and it disentangles risk aversion and inequality aversion. The authors show that these social objectives imply interesting modifications of the Ramsey formula, and shed new light on Weitzman's "dismal theorem".

Keywords: discounted utilitarianism; social discounting (search for similar items in EconPapers)
JEL-codes: D63 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-hpe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.econstor.eu/bitstream/10419/103208/1/799013447.pdf (application/pdf)

Related works:
Working Paper: Discounting, beyond Utilitarianism (2015)
Working Paper: Discounting, beyond Utilitarianism (2015)
Working Paper: Discounting, beyond Utilitarianism (2015)
Working Paper: Discounting, beyond utilitarianism (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201440

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