Properties of the Social Discount Rate in a Benthamite Framework with Heterogeneous Degrees of Impatience
Jouini, Elyès; Napp, Clotilde; Nocetti, Diego (2008), Properties of the Social Discount Rate in a Benthamite Framework with Heterogeneous Degrees of Impatience, Management Science, 54, 10, p. 1822-1826. http://dx.doi.org/10.1287/mnsc.1080.0904
Type
Article accepté pour publication ou publiéExternal document link
http://halshs.archives-ouvertes.fr/halshs-00365980/fr/Date
2008Journal name
Management ScienceVolume
54Number
10Publisher
INFORMS
Pages
1822-1826
Publication identifier
Metadata
Show full item recordAbstract (EN)
This paper derives the properties of the discount rate that should be applied to a public-sector project when the affected population has heterogeneous degrees of impatience. We show that, for any distribution of discount rates, the social discount rate has the following properties: it decreases over time, it is lower than the average of the discount rates in the population, and it converges to the discount rate of the most patient individual in the economy. These properties hold for both constant and decreasing individual discount rates. Finally, we evaluate how changes in the distribution of individual discount rates affect the social discount rate.Subjects / Keywords
Social Discount Rate; Hyperbolic Discounting; Cost-Benefit AnalysisRelated items
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Nocetti, Diego; Napp, Clotilde; Jouini, Elyès (2012-05) Communication / Conférence
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Jouini, Elyès; Napp, Clotilde; Nocetti, Diego (2013) Article accepté pour publication ou publié
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Jouini, Elyès; Napp, Clotilde; Nocetti, Diego (2013) Article accepté pour publication ou publié
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Jouini, Elyès; Napp, Clotilde (2008) Document de travail / Working paper
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Jouini, Elyès; Napp, Clotilde; Nocetti, Diego (2013) Article accepté pour publication ou publié