TY  - GEN
CY  - Heidelberg
N2  - Decisions with long-term consequences require comparing utility derived from present consumption to future welfare. But can we infer socially relevant intertemporal preferences from saving behavior? I allow for a decomposition of the present generation?s preference for the next generation into its dynastic and crossdynastic counterparts, in the form of welfare weights on the next generation in the own dynasty and other dynasties. Welfare weights on other dynasties can be motivated by a concern for sustainability, or if descendants may move or marry outside the dynasty. With such cross-dynastic intergenerational altruism, savings for one?s own descendants bene?t present members of other dynasties, giving rise to preference externalities. I ?nd that socially relevant intertemporal preferences may not be inferred from saving behavior if there is cross-dynastic intergenerational altruism. I also show that the external e?ect of present saving decreases over time. This means that intertemporal preferences inferred from saving behavior are time-inconsistent, unless cross-dynastic intergenerational altruism is accounted for.
UR  - https://archiv.ub.uni-heidelberg.de/volltextserver/27977/
A1  - Nesje, Frikk
Y1  - 2020/03//
T3  - Discussion Paper Series / University of Heidelberg, Department of Economics
KW  - intergenerational altruism
KW  -  social discounting
KW  -  time-inconsistency
KW  -  declining discount rates
KW  -  generalized consumption Euler equations
KW  -  interdependent utility
KW  -  isolation paradox
EP  - 55
AV  - public
ID  - heidok27977
TI  - Cross-dynastic Intergenerational Altruism
ER  -