Time preferences for the very long term

Many important decisions concern outcomes delayed by decades or centuries. Whereas some economists have argued that inter-generational discount rates should be lower than intra-generational rates, three experiments found that inter- and intra-generational discount rates were quite similar. Experiment 1 found that discount rates for long delays (30-900 years) were lower than those for shorter delays (1-30 years) but that, holding delay constant, discount rates for outcomes occurring to future generations were similar to those for outcomes occurring to the present generation. Experiment 2 compared inter-generational discount rates for three different types of outcomes and found similar discount rates for saving lives, improving health, and financial benefits. Experiment 3 found similar inter-generational discounting of life-saving programs that benefit people close to or distant from the decision maker. These studies indicate that the discount rate applied to outcomes occurring to future generations depends on the length of the time delay but not on other factors.