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Do People Care About Future Generations? Derived Preferences from Happiness Data

Stefano Bartolini and Francesco Sarracino

Ecological Economics, 2018, vol. 143, issue C, 253-275

Abstract: The main approaches for computing very long-term discount rates – revealed and stated preferences – have limitations. We overcome previous shortcomings using derived preferences, i.e. we retrieve information on very long-term time preferences from happiness data and people's expectations about the living conditions of future generations. We account for possible endogeneity between expectations about the future and current well-being using 2SLS. We find that negative (positive) expectations about future generations have a very large negative (positive) impact on subjective well-being. This finding suggests that the very long-term discount rate is lower than implied by most traditional economic analyses.

Keywords: Subjective well-being; Long-term discount rate; Intergenerational equity; Sustainability; Discounting; Climate change (search for similar items in EconPapers)
JEL-codes: D62 D63 I31 Q51 (search for similar items in EconPapers)
Date: 2018
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