On discount rates

post by William_MacAskill · 2013-07-22T04:00:53.000Z · EA · GW · Legacy · None comments

The question of what discount rate EAs should have is very important, and very tricky. I really have absolutely no idea what the correct answer is.

I’ll just make one comment here, though: which is that using “discount rate” as a term to denote this issue could be pretty misleading. When economists discount future income, they apply a steady discount rate: if the discount rate is 3%, then receiving $1 is worth $1 at year0, $(1*0.97) at year1, $(1*0.97*0.97) at year2, and so on. But it’s almost certain that an EA’s discount rate should be variable. If I had to guess what my discount rate should be, I’d put it at something like 30% for the next couple of years (because I think that it’s a particularly critical time for effective altruism, which I think is a particularly important social movement), tailing down to something close to 0% (and maybe even going negative for a while) after 5 or 6 years (because then I expect the effects of having a bigger and better platform on which to talk about effective altruism to counterbalance the benefits of doing things earlier rather than later).

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