Discounting Dollars, Discounting Lives: Intergenerational Distributive Justice and Efficiency

39 Pages Posted: 31 Jul 2006

See all articles by Louis Kaplow

Louis Kaplow

Harvard Law School; National Bureau of Economic Research (NBER)

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Abstract

The view that intergenerational distributive justice and efficiency should be treated separately is familiar, yet controversial. This article elaborates the often-implicit justifications for separate treatment and provides a more express statement of how and when such treatment is appropriate. Substantial attention is devoted to an approach that holds constant the intra- and intergenerational distribution of well-being, which proves to be a valuable analytical device even for intergenerational policies that are not distribution neutral. Also explored are possible interrelationships between intergenerational distributive justice and efficiency, the choice of interest rate for discounting dollars, and how the present approach relates to those that would employ direct social weights to dollars at different points in time.

JEL Classification: D31, D61, D63, D81, D99, H23, H43, K32, Q28, Q38

Suggested Citation

Kaplow, Louis, Discounting Dollars, Discounting Lives: Intergenerational Distributive Justice and Efficiency. University of Chicago Law Review, Forthcoming; Harvard Law and Economics Discussion Paper No. 550. Available at SSRN: https://ssrn.com/abstract=921436

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