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Positively gamma discounting: combining the opinions of experts on the social discount rate
journal contribution
posted on 2015-02-12, 12:01 authored by Mark Freeman, Ben GroomThe aggregated term structure of social discount rates that results from Weitzman's (2001) survey of expert opinion is shown to be highly sensitive to the nature of the responses. If variation reflects irreducible differences in ethical judgments, the term structure can decline rapidly. If variation occurred because respondents were forecasting future rates under uncertainty, the term structure is much flatter because additional experts provide new information. The former approach triples the social cost of carbon when compared to the latter. The distinction between heterogeneity and uncertainty illustrates the need for a nuanced treatment of survey data in intergenerational policy making.
History
School
- Business and Economics
Department
- Business
Published in
The Economic JournalVolume
125Issue
585Pages
1015 - 1024Citation
FREEMAN, M. and GROOM, B., 2014. Positively gamma discounting: combining the opinions of experts on the social discount rate. The Economic Journal 125(585), pp.1015-1024.Publisher
John Wiley & Sons (© Royal Economic Society)Version
- AM (Accepted Manuscript)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Publication date
2014-07-17Notes
This is the peer reviewed version of the following article: FREEMAN, M. and GROOM, B., 2014. Positively gamma discounting: combining the opinions of experts on the social discount rate. The Economic Journal 125(585), pp.1015-1024., which has been published in final form at http://dx.doi.org/10.1111/ecoj.12129. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.ISSN
0013-0133eISSN
1468-0297Publisher version
Language
- en