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Do People Care About Future Generations? Derived Preferences from Happiness Data

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  • Bartolini, Stefano
  • Sarracino, Francesco

Abstract

The main approaches for computing very long-term discount rates – revealed and stated preferences – have limitations. We overcome previous shortcomings using derived preferences, i.e. we retrieve information on very long-term time preferences from happiness data and people's expectations about the living conditions of future generations. We account for possible endogeneity between expectations about the future and current well-being using 2SLS. We find that negative (positive) expectations about future generations have a very large negative (positive) impact on subjective well-being. This finding suggests that the very long-term discount rate is lower than implied by most traditional economic analyses.

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  • Bartolini, Stefano & Sarracino, Francesco, 2018. "Do People Care About Future Generations? Derived Preferences from Happiness Data," Ecological Economics, Elsevier, vol. 143(C), pages 253-275.
    • Handle: RePEc:eee:ecolec:v:143:y:2018:i:c:p:253-275
    DOI: 10.1016/j.ecolecon.2017.06.029
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    2. Stefano Bartolini & Francesco Sarracino, 2021. "Happier and Sustainable. Possibilities for a post-growth society," Department of Economics University of Siena 855, Department of Economics, University of Siena.
    3. Ferreira, Susana & Moro, Mirko & Welsch, Heinz, 2024. "Using Life Satisfaction and Happiness Data for Environmental Valuation: An Experienced Preference Approach," IZA Discussion Papers 16718, Institute of Labor Economics (IZA).
    4. Heinz Welsch, 2024. "Do National Well-Being Scores Capture Nations’ Ecological Resilience? Evidence for 124 Countries," Working Papers V-443-24, University of Oldenburg, Department of Economics, revised Jan 2024.

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    More about this item

    Keywords

    Subjective well-being; Long-term discount rate; Intergenerational equity; Sustainability; Discounting; Climate change;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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