Artikel

Discounting, beyond utilitarianism

Discounted utilitarianism and the Ramsey equation prevail in the debate on the discount rate on consumption. The utility discount rate is assumed to be constant and to reflect either the uncertainty about the existence of future generations or a pure preference for the present. The authors question the unique status of discounted utilitarianism and discuss the implications of alternative criteria addressing the key issues of equity in risky situations and variable population. To do so, they introduce a class of intertemporal social objectives, named Expected Prioritarian Equally Distributed Equivalent (EPEDE) criteria. The class is more flexible than discounted utilitarianism in terms of population ethics and it disentangles risk aversion and inequality aversion. The authors show that these social objectives imply interesting modifications of the Ramsey formula, and shed new light on Weitzman's "dismal theorem".

Language
Englisch

Bibliographic citation
Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 9 ; Year: 2015 ; Issue: 2015-12 ; Pages: 1-52 ; Kiel: Kiel Institute for the World Economy (IfW)

Classification
Wirtschaft
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Subject
discounted utilitarianism
social discounting

Event
Geistige Schöpfung
(who)
Fleurbaey, Marc
Zuber, Stéphane
Event
Veröffentlichung
(who)
Kiel Institute for the World Economy (IfW)
(where)
Kiel
(when)
2015

DOI
doi:10.5018/economics-ejournal.ja.2015-12
Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Artikel

Associated

  • Fleurbaey, Marc
  • Zuber, Stéphane
  • Kiel Institute for the World Economy (IfW)

Time of origin

  • 2015

Other Objects (12)