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Are Discount Rates Too High? Population Health and Intergenerational Equity

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  • R. Scott Braithwaite

    (Division of Comparative Effectiveness and Decision Science, Department of Population Health, NYU School of Medicine, New York, NY, USA)

  • Mark S. Roberts

    (Department of Health Policy and Management, University of Pittsburgh Public Health, Pittsburgh, PA, USA)

Abstract

Increasing attention is being paid to policy decisions in which shorter-term benefits may be eclipsed by longer-term harms, such as environmental damage. Health policy decisions have largely been spared this scrutiny, even though they too may contribute to longer-term harms. Any healthy population or society must sustain itself through reproduction, and therefore, transgenerational outcomes should be of intrinsic importance from a societal perspective. Yet, the discount rates typically employed in cost-effectiveness analyses have the effect of minimizing the importance of transgenerational health outcomes. We argue that, because cost-effectiveness analysis is based on foundational axioms of decision theory, it should value transgenerational outcomes consistently with those axioms, which require discount rates substantially lower than 3%. We discuss why such lower rates may not violate the Cretin-Keeler paradox.

Suggested Citation

  • R. Scott Braithwaite & Mark S. Roberts, 2021. "Are Discount Rates Too High? Population Health and Intergenerational Equity," Medical Decision Making, , vol. 41(2), pages 245-249, February.
    • Handle: RePEc:sae:medema:v:41:y:2021:i:2:p:245-249
    DOI: 10.1177/0272989X20979816
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    References listed on IDEAS

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