Skip to main content

Discounting Compensation for Injuries

Buy Article:

$51.00 plus tax (Refund Policy)


The reasons commonly given for discounting future costs and benefits are doubtfully applicable to future injuries: in particular, time preference justifies neither inter- nor intragenerational discounting. The cost of future injuries could be discounted on grounds that a smaller sum, invested at interest, is needed to pay a given level of ex post monetary compensation the further in the future the injury occurs. This effect is offset, however, by the diminishing marginal utility of compensation, if consumption is otherwise increasing. Depending on the elasticity of marginal utility of consumption, on whether consumption is growing at an optimal rate, and on the time period considered, the implicit discount rate may be positive, zero, or negative (even indefinitely so). There is no prospect of conventional discounting dealing appropriately with the cost of injuries to either future or present generations.

Keywords: Discounting; compensation; cost-benefit analysis; injuries

Document Type: Original Article


Affiliations: School of Agricultural and Forest Sciences, University of Wales, Bangor, United Kingdom

Publication date: 2000-12-01

  • Access Key
  • Free ContentFree content
  • Partial Free ContentPartial Free content
  • New ContentNew content
  • Open Access ContentOpen access content
  • Partial Open Access ContentPartial Open access content
  • Subscribed ContentSubscribed content
  • Partial Subscribed ContentPartial Subscribed content
  • Free Trial ContentFree trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more