Social discount rate: spaces for agreement

Hayashi, T. and Lombardi, M. (2021) Social discount rate: spaces for agreement. Economic Theory Bulletin, 9(2), pp. 247-257. (doi: 10.1007/s40505-021-00209-9)

Abstract

We study the problem of aggregating discounted utility preferences into a social discounted utility preference model. We use an axiom capturing a social responsibility of individuals’ attitudes to time, called consensus Pareto. We show that this axiom can provide consistent foundations for welfare judgments. Moreover, in conjunction with the standard axioms of anonymity and continuity, consensus Pareto can help adjudicate some fundamental issues related to the choice of the social discount rate: the society selects the rate through a generalized median voter scheme.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Lombardi, Dr Michele and Hayashi, Professor Takashi
• Authors: Hayashi, T., and Lombardi, M.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: Economic Theory Bulletin
• Publisher: Springer
• ISSN: 2196-1085
• ISSN (Online): 2196-1093
• Published Online: 17 August 2021
• Copyright Holders: Copyright © 2021 The Authors
• First Published: First published in Economic Theory Bulletin 9(2): 247-257
• Publisher Policy: Reproduced under a Creative Commons License