Evaluating Long-Lived Projects: The Issue Of Inter-Generational Equity
AbstractThe role of the discount rate in benefit-cost analysis is reviewed, and its impact considered. A positive rate clearly 'tilts the balance overwhelmingly against generations in the distant future'. In this context, the issue of inter-generational equity is discussed, and it is concluded that although a positive rate representing social time preference or opportunity cost is appropriate when considering questions of economic efficiency, this is not the case when equity questions are being examined. In the case of irreversible change, an extreme example of inter-generational inequity, there may be no alternative to a constrained optimisation approach, where the constraint is determined by an ethical decision. A range of approaches for analysing the issue of inter-generational equity are canvassed and it is concluded that efficiency and equity questions need to be dealt with separately. If the analysis of the options on each issue are set out clearly, then policy makers will be better placed to make an informed and responsible decision.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.
Volume (Year): 36 (1992)
Issue (Month): 03 (December)
Contact details of provider:
Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
Phone: 0409 032 338
Web page: http://www.aares.info/
More information through EDIRC
Institutional and Behavioral Economics;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Common, Mick & Perrings, Charles, 1992. "Towards an ecological economics of sustainability," Ecological Economics, Elsevier, vol. 6(1), pages 7-34, July.
- Hartwick, John M, 1978. "Substitution among Exhaustible Resources and Intergenerational Equity," Review of Economic Studies, Wiley Blackwell, vol. 45(2), pages 347-54, June.
- Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(1), pages 141-49.
- R. M. Solow, 1973. "Intergenerational Equity and Exhaustable Resources," Working papers 103, Massachusetts Institute of Technology (MIT), Department of Economics.
- Krautkraemer, Jeffrey A, 1985. "Optimal Growth, Resource Amenities, and the Preservation of Natural Environments," Review of Economic Studies, Wiley Blackwell, vol. 52(1), pages 153-70, January.
- Harry R Clarke, 1991.
"Risk, Uncertainty and Irreversibility Implications for Sustainable Development,"
1991.13, School of Economics, La Trobe University.
- Randall, Alan, 1982. "Economic Surplus Concepts and Their Use in Benefit Cost Analysis," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(02), August.
- Jayasuriya, Sisira, 1992. "Economists On Sustainability," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(02), August.
- John Hartwick, 1976.
"Intergenerational Equity and the Investing of Rents from Exhaustible Resources,"
220, Queen's University, Department of Economics.
- Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-74, December.
- Norgaard, Richard B., 1989. "The case for methodological pluralism," Ecological Economics, Elsevier, vol. 1(1), pages 37-57, February.
- Christensen, Paul P., 1989. "Historical roots for ecological economics -- Biophysical versus allocative approaches," Ecological Economics, Elsevier, vol. 1(1), pages 17-36, February.
- Hoehn, John P & Randall, Alan, 1989. "Too Many Proposals Pass the Benefit Cost Test," American Economic Review, American Economic Association, vol. 79(3), pages 544-51, June.
- Gijsbers, D. & Nijkamp, P., 1987.
"Non-uniform social rates of discount in natural resource models : an overview of arguments and consequences,"
Serie Research Memoranda
0073, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Gijsbers, D. & Nijkamp, P., 1987. "Non-uniform social rates of discount in natural resource models : an overview of arguments and consequences," Serie Research Memoranda 0073, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Mikesell, Raymond F., 1989. "Depletable resources, discounting and intergenerational equity," Resources Policy, Elsevier, vol. 15(4), pages 292-296, December.
- Kirby, Michael G. & Blyth, Michael J., 1987. "Economic Aspects Of Land Degradation In Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(02), August.
- John M. Hartwick, 1978.
"Investing Returns from Depleting Renewable Resource Stocks and Intergenerational Equity,"
294, Queen's University, Department of Economics.
- Hartwick, John M., 1978. "Investing returns from depleting renewable resource stocks and intergenerational equity," Economics Letters, Elsevier, vol. 1(1), pages 85-88.
- Lind, Robert C., 1990. "Reassessing the government's discount rate policy in light of new theory and data in a world economy with a high degree of capital mobility," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages S8-S28, March.
- Sjaastad, Larry A & Wisecarver, Daniel L, 1977. "The Social Cost of Public Finance," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 513-47, June.
- Krautkraemer, Jeffrey A., 1986. "Optimal depletion with resource amenities and a backstop technology," Resources and Energy, Elsevier, vol. 8(2), pages 133-149, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.