Justifying Social Discounting: The Rank-Discounted Utilitarian Approach

Stéphane Zuber and Geir Asheim

No 3192, CESifo Working Paper Series from CESifo

Abstract: The discounted utilitarian criterion for infinite horizon social choice has been criticized for treating generations unequally. We propose an extended rank-discounted utilitarian (ERDU) criterion instead. The criterion amounts to discounted utilitarianism on non-decreasing streams, but it treats all generations impartially: discounting becomes the mere expression of intergenerational inequality aversion. We show that more inequality averse ERDU societies have higher social discount rates when future generations are better-off. We apply the ERDU approach in two benchmark economic growth models and prove that it promotes sustainable policies that maximize discounted utilitarian welfare.

Keywords: intergenerational equity; social discounting; discounted utilitarianism; sustainability (search for similar items in EconPapers)
JEL-codes: D63 H43 Q56 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Justifying social discounting: The rank-discounted utilitarian approach (2012)
Working Paper: Justifying social discounting: the rank-discounted utilitarian approach (2010)
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