Discounting: reflections on the scientific and ethical dimensions of the debate

H. Unnerstall

International Journal of Sustainable Development, 2003, vol. 6, issue 1, 54-69

Abstract: Discounting is still a highly contested element of cost–benefit analysis. From an epistemological point of view, three levels of arguments must be distinguished: the empirical, the conceptual and the ethical level. On the conceptual level, discounting turns out to be a hypothesis that has to be justified empirically. This approach requires a method for a direct (utility-)evaluation of future cash-flows in order to prove that discounting correctly represents changes of utility-values in time. Reacting on ethical criticism, economic theory tends to draw a sharp line between intra- and inter-generational discounting. This is ethically unacceptable as the composition of any generation is arbitrary. Therefore, many intra-generational problems can be reformulated as inter-generational problems and vice versa. There can be only one consistent theory of inter-temporal justice.

Keywords: discounting; empirical basis of discounting; epistemology of discounting; intergenerational justice; intragenerational justice; intertemporal justice; meta-evaluation. (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (2)

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