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PURE TIME PREFERENCE IN INTERTEMPORAL WELFARE ECONOMICS

Published online by Cambridge University Press:  05 May 2017

J. Paul Kelleher
J. Paul Kelleher*
Affiliation:
University of Wisconsin-Madison, Medical Sciences Center, 1300 University Ave., Room 1430, Madison, WI, 53706, USA. Email: [email protected]. URL: https://medhist.wisc.edu/faculty/kelleher/index.shtml.
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Abstract:

Several areas of welfare economics seek to evaluate states of affairs as a function of interpersonally comparable individual utilities. The aim is to map each state of affairs onto a vector of individual utilities, and then to produce an ordering of these vectors that can be represented by a mathematical function assigning a real number to each. When this approach is used in intertemporal contexts, a central theoretical question concerns the rate of pure time preference, i.e. the evaluative weight to be applied to utility coming at different times. This article criticizes the standard philosophical account of pure time preference, arguing that it ascribes to economists a methodological commitment they need not accept. The article then evaluates three further objections to pure time preference, concluding that it might still be defensible under certain circumstances. I close by articulating a final argument that, if sound, would constitute a decisive objection to pure time preference as it currently figures in much intertemporal welfare economics.

Keywords

Social discount ratediscounted utilitarianismtime preferencefuture generationsintergenerational equity
Type
Articles
Information
Economics & Philosophy , Volume 33 , Issue 3 , November 2017 , pp. 441 - 473
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Copyright
Copyright © Cambridge University Press 2017 

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