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Adler, Matthew and Treich, Nicolas
(2014)
Consumption, Risk and Prioritarianism.
TSE Working Paper, n. 14-500, Toulouse
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Abstract
Most economic problems combining risk and equity have been studied under utilitarianism. As an alternative, we study consumption decisions under risk assuming a prioritarian social welfare function. Under a standard assumption about the utility function (i.e., decreasing absolute risk aversion), there is always more current consumption under ex ante prioritarianism than under utilitarianism. Thus, a concern for equity (in the ex ante prioritarian sense) means less concern for the risky future. In contrast, under standard utility and social welfare functions, there is less current consumption under ex post prioritarianism than under utilitarianism.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | February 2014 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Precautionary savings, utilitarianism, prioritarianism, discounting, climate change |
| JEL Classification: | D81 - Criteria for Decision-Making under Risk and Uncertainty E21 - Macroeconomics - Consumption; Saving; Aggregate Physical and Financial Consumer Wealth I31 - General Welfare; Basic Needs; Living Standards; Quality of Life; Happiness |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 09 Jul 2014 17:45 |
| Last Modified: | 02 Apr 2021 15:48 |
| OAI Identifier: | oai:tse-fr.eu:28283 |
| URI: | https://publications.ut-capitole.fr/id/eprint/15944 |
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