Mock Referenda for Intergenerational Decision-making

Traditional applications of benefit-cost analysis make use of what we refer to as the "damage function and discounting" (or DFD) approach. This approach is well-suited to the analysis of projects for which the principal benefits and costs occur within the next thirty to forty years, say. However, for projects with significant intergenerational consequences--i.e., impacts that do not arise for hundreds of years or more--the DFD approach becomes almost intractable. We propose an alternative conception of benefit-cost analysis for intergenerational decision-making--the mock referendum--that is: (i) arguably more consistent with the tenets of modern welfare economics; (ii) more amenable to the analysis of long-term projects or policies; and (iii) consistent with political decision(s) that must be made if climate mitigation (or other long-term environmental protection) measures are to be taken.


Issue Date:
1997
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/10745
Total Pages:
20
JEL Codes:
D6; H4
Series Statement:
Discussion Paper 97-48




 Record created 2017-04-01, last modified 2017-08-23

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