Inequality Aversion and Efficiency with Ordinal and Cardinal Social Preferences – An Experimental Study

Inequality aversion and efficiency with ordinal and cardinal social preferences—An experimental study

Journal of Economic Behavior & Organization ◽

10.1016/j.jebo.2010.06.002 ◽

2010 ◽

Vol 76 (2) ◽

pp. 238-253 ◽

Cited By ~ 13

Author(s):

Dorothea K. Herreiner ◽

Clemens Puppe

Keyword(s):

Experimental Study ◽

Social Preferences ◽

Inequality Aversion

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Social Preferences and Supply Chain Performance: An Experimental Study

Management Science ◽

10.1287/mnsc.1080.0910 ◽

2008 ◽

Vol 54 (11) ◽

pp. 1835-1849 ◽

Cited By ~ 207

Author(s):

Christoph H. Loch ◽

Yaozhong Wu

Keyword(s):

Experimental Study ◽

Supply Chain ◽

Social Preferences ◽

Supply Chain Performance

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A New Look into the Determinants of the Ecological Discount Rate: Disentangling Social Preferences

The B E Journal of Economic Analysis & Policy ◽

10.1515/1935-1682.3102 ◽

2012 ◽

Vol 12 (1) ◽

Cited By ~ 1

Author(s):

Luciana Echazu ◽

Diego Nocetti ◽

William T. Smith

Keyword(s):

Term Structure ◽

Discount Rate ◽

Environmental Quality ◽

Social Preferences ◽

Inequality Aversion ◽

The Social ◽

Representative Consumer ◽

Change Mitigation ◽

Over Time

Abstract How should changes in environmental quality occurring in the future be discounted? To answer this question we consider a model of “ecological discounting”, where the representative consumer has a utility function defined over two attributes, consumption and environmental quality, which evolve stochastically over time. We characterize the determinants of the social discount rate and its behavior over time using a preference structure that disentangles attitudes towards intertemporal inequality, attitudes towards risk, and tastes over consumption and environmental quality. We show that the degree of substitutability between consumption and environmental quality, the degree of risk aversion, the degree of inequality aversion, and the rate at which these attitudes change as natural and man-made resources evolve over time are all important aspects of the ecological discount rate and its term structure. Our analysis suggests that over medium and long term horizons the ecological discount rate should be below the rate of time preference, supporting recent proposals for immediate action towards climate change mitigation.

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