Altruism and egoism : measurable by utility discount rates?

We analyze the role of "the" utility discount rate and its implications to generation-specific and societal altruism and egoism, respectively, in a neoclassical framework. It is worked out clearly, that two different utility discount rates have to be distinguished: An (inverse) altruism-parameter and a social discount rate. High levels of the altruism-parameter depict relatively weak altruistic behavior. However, high levels of the social discount rate are in general introduced to argue within egoism-models. The often found conjecture that the level of "the" discount rate determines whether we argue altruistically or egoistically can, therefore, not be confirmed. It is stated that rather the assumed utility/welfare function is decisive for egoistic and altruistic analyses. Connecting our considerations with the utilitarian requirement for equal treatment of all affected individuals (generations) we conclude that the social discount rate has to be set to zero in egoism - as well as altruism-models and, additionally, the altruism-parameter has to be infinitely high. This shows clearly that the level of "the" discount rate is insufficient for decisions whether a specific analysis is altruistic or egoistic. At the end of our analysis we draw some conclusions applying our considerations to simulation models with respect to global warming.