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The Irrelevance of Intergenerational Altruism for Social Discounting

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  • Eden, Maya

Abstract

Should people’s concern for the wellbeing of their descendants affect policy decisions? I consider a model in which people’s dynastic utilities depend on the consumption of their descendants. The social welfare function is a discounted sum of past, present and future dynastic utilities. I establish that, when population growth is constant, intergenerational altruism has no effect on the social ranking, and can be ignored for the purpose of policy decisions. The reason is that, given constant population growth, each generation’s concern for its children cancels out with their parents’ concern for them. Quantitatively, despite the variation in humanity’s growth rates, intergenerational altruism has only negligible effects on the social welfare function.

Suggested Citation

  • Eden, Maya, 2024. "The Irrelevance of Intergenerational Altruism for Social Discounting," CEPR Discussion Papers 19147, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19147
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    More about this item

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • D6 - Microeconomics - - Welfare Economics

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