Consumption, Risk and Prioritarianism

Matthew Adler and Nicolas Treich

No 14-500, TSE Working Papers from Toulouse School of Economics (TSE)

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.

Keywords: Precautionary savings; utilitarianism; prioritarianism; discounting; climate change (search for similar items in EconPapers)
JEL-codes: D81 E21 I31 (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-mac and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.tse-fr.eu/sites/default/files/medias/doc/wp/env/wp_tse_500.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:28283

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().