Non-paternalistic social discounting

Abstract

The long-run social discount rate converts the long-term costs and benefits of public projects into present values. Its value depends on parameters of social preferences that capture social impatience and aversion to intertemporal consumption inequalities. Experts disagree about these ethical parameters, leading to substantial disagreements on the benefits of projects with long-term consequences. However, I show that if experts with diverse opinions on social preferences wish to avoid being paternalistic (i.e. imposing their opinions on others), they must agree on these parameters. Addressing one common critique of normative social discounting (paternalism) thus helps to resolve another operational difficulty (disagreement).