Discounting, risk and inequality: A general approach

Marc Fleurbaey and Stéphane Zuber

Journal of Public Economics, 2015, vol. 128, issue C, 34-49

Abstract: The common practice consists in using a unique value of the discount rate for all public investments. Endorsing a social welfare approach to discounting, we show how different public investments should be discounted depending on: the risk on the returns on investment, the systematic risk on aggregate consumption, the distribution of gains and losses, and inequality. We also study the limit value of the discount rate for very long term investments. We highlight the type of information that is needed about long-term scenarios in order to evaluate investments.

Keywords: Social discounting; Risk; Inequality (search for similar items in EconPapers)
JEL-codes: D63 H43 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Discounting, risk and inequality: A general approach (2015)
Working Paper: Discounting, risk and inequality: A general approach (2015)
Working Paper: Discounting, risk and inequality: A general approach (2015)
Working Paper: Discounting, Risk and Inequality: A General Approach (2014)
Working Paper: Discounting, Risk and Inequality: A General Approach (2014)
Working Paper: Discounting, Risk and Inequality: A General Approach (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:128:y:2015:i:c:p:34-49

DOI: 10.1016/j.jpubeco.2015.05.003

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