Trading off generations: Equity, discounting, and climate change

Schneider, Maik T.; Traeger, Christian P.; Winkler, Ralph

doi:10.1016/j.euroecorev.2012.08.006

Cited by 51 publications

(36 citation statements)

References 36 publications

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“…In this case, the social planner optimally distributes consumption equally among all households alive in each period, i.e. c(t, s) =c(t) ∀s ≤ t. A proof of this result will be provided upon request and can also be found -together with a general discussion of optimal intratemporal consumption profiles including the cases ρ s = ρ -in Schneider et al (2012). With this result of the inner problem, we now turn to the outer problem with the difficulty that the integrals in the constraints cannot be eliminated.…”

Section: A2 Social Planner's Welfare Maximization Problemmentioning

confidence: 99%

“…35 This split is typically used in welfare analysis of continuous-time overlapping generations models (see, e.g., Calvo and Obstfeld (1988) or Schneider et al (2012)). …”

Section: A2 Social Planner's Welfare Maximization Problemmentioning

confidence: 99%

“…16 For a discussion of the effects of the relationship between individual time preference rates and that of the social planner on the allocation of consumption across different age cohorts, see for example, Schneider et al (2012).…”

Section: The Social Planner's Solutionmentioning

confidence: 99%

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Growth and Welfare under Endogenous Lifetime

Schneider

Winkler

2011

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Growth and Welfare under Endogenous Lifetime AbstractWe study the role of endogenous healthcare choices by households to extend their expected lifetimes on economic growth and welfare in a decentralized overlapping generations economy with the realistic feature that households' savings are held in annuities. We characterize healthcare spending in the decentralized market equilibrium and its effects on economic growth. We identify the moral-hazard effect in healthcare investments when annuity rates are conditioned on average mortality and explain the conditions under which this leads to overinvestment in healthcare. Moreover, we specify the general equilibrium effects and macroeconomic repercussions associated with this moral-hazard effect. In a numerical simulation of our model with OECD data, we find that the moral-hazard effect may be substantial and implies sizeable welfare losses of approximately 1.5%. At a more general level, our study suggests that welfare improvements from longevity increases may be lower than suggested when considered in planner economies.JEL-Codes: O400, I100, J100.

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Section: A2 Social Planner's Welfare Maximization Problemmentioning

confidence: 99%

“…35 This split is typically used in welfare analysis of continuous-time overlapping generations models (see, e.g., Calvo and Obstfeld (1988) or Schneider et al (2012)). …”

Section: A2 Social Planner's Welfare Maximization Problemmentioning

confidence: 99%

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Growth and Welfare under Endogenous Lifetime

Schneider

Winkler

2011

SSRN Journal

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“…The relevance of intergenerational altruism is highlighted by its key role in various economic applications, including optimal national savings (Ramsey (1928), Phelps and Pollak (1968)), economic growth (Bernheim (1989)), charitable giving (Andreoni (1989)), family economics (Bergstrom (1997)), public finance (Barro (1974)), and environmental economics (Weitzman (1999), Dasgupta (2008), Schneider et al (2012)). …”

Section: Related Literaturementioning

confidence: 99%

From Anticipations to Present Bias: A Theory of Forward-Looking Preferences

Galperti

Strulovici²

2014

SSRN Journal

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Modeling intergenerational altruism is crucial to evaluate the long-term consequences of current decisions, and requires a set of principles guiding such altruism.We axiomatically develop a theory of pure, direct altruism: Altruism is pure if it concerns the total utility (rather than the mere consumption utility) of future generations, and direct if it directly incorporates the utility of all future generations. Our axioms deliver a new class of altruistic, forward-looking preferences, whose weight put on the consumption of a future generation generally depends on the consumption of other generations. The only preferences lacking this dependence correspond to the quasi-hyperbolic discounting model, which our theory characterizes. Our approach provides a framework to analyze welfare in the presence of altruistic preferences and addresses technical challenges stemming from the interdependent nature of such preferences.

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“…Indices of relative poverty can be used to weight impacts of wide spread environmental risks (e.g., [103]), and discount rates are used to reduce the relative weight of future to current costs [104]. Since costs and benefits are not borne equally between different communities, weighting schemes have both inter-and intra-generational equity trade-offs (e.g., [105]). One justification for discounting is that growth will ensure that future generations will be wealthier.…”

Section: Step 4 Risk Evaluation: Do We Need To Act To Reduce the Rismentioning

confidence: 99%

Managing Forests for Water in the Anthropocene—The Best Kept Secret Services of Forest Ecosystems

Creed

Weber

Accatino

et al. 2016

Forests

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Water and forests are inextricably linked. Pressures on forests from population growth and climate change are increasing risks to forests and their aquatic ecosystem services (AES). There is a need to incorporate AES in forest management but there is considerable uncertainty about how to do so. Approaches that manage forest ecosystem services such as fiber, water and carbon sequestration independently ignore the inherent complexities of ecosystem services and their responses to management actions, with the potential for unintended consequences that are difficult to predict. The ISO 31000 Risk Management Standard is a standardized framework to assess risks to forest AES and to prioritize management strategies to manage risks within tolerable ranges. The framework consists of five steps: establishing the management context, identifying, analyzing, evaluating and treating the risks. Challenges to implementing the framework include the need for novel models and indicators to assess forest change and resilience, quantification of linkages between forest practice and AES, and the need for an integrated systems approach to assess cumulative effects and stressors on forest ecosystems and AES. In the face of recent international agreements to protect forests, there are emerging opportunities for international leadership to address these challenges in order to protect both forests and AES.

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Trading off generations: Equity, discounting, and climate change

Cited by 51 publications

References 36 publications

Growth and Welfare under Endogenous Lifetime

Growth and Welfare under Endogenous Lifetime

From Anticipations to Present Bias: A Theory of Forward-Looking Preferences

Managing Forests for Water in the Anthropocene—The Best Kept Secret Services of Forest Ecosystems

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