Discounting, Risk and Inequality: A General Approach

Marc Fleurbaey and Stéphane Zuber

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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 return of the 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, and the type of information that is needed about long-term scenarios in order to evaluate investments.

Keywords: Social discounting; risk; inequality; Escompte social; risque; inégalité (search for similar items in EconPapers)
Date: 2014-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00973471v1
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Published in 2014

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Related works:
Journal Article: 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 (2015)
Working Paper: Discounting, Risk and Inequality: A General Approach (2014)
Working Paper: Discounting, Risk and Inequality: A General Approach (2014)
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