Temporal discounting

People often think that we should value goods in the future less than goods now. There are a variety of different reasons why weWe might discount the future:future for various reasons. For instance, we might simply care less about the future than we doabout the present (this is known as pure time preference). Alternately, we might care just as much about my future,the future but think that there is some probability that it will not be possible to reap the benefits at that time (forcome about. Someone may, for instance, I might care less about my personaltheir income in 40 years, simplyyears because there's a reasonable chance that Ithey will be dead by then, and not able to enjoy the income). A variety ofthen. Various other reasons might apply, depending on the good under discussion.

A discount function shows how the value of a good decreases if it occurs at different times. A particularly common form of discount function is exponential. In this case, the discount rate (in annualized form) is the percentage decrease in the value of a good, one year into the future, compared to now. So if you value a sweet in a year 20% less than having a sweet now, you are using a discount rate of 20%.

BibliographyFurther reading

Temporal discounting (also called time discounting) is the discounting of the value of a good the further into the future it occurs.is expected to be realized.

Temporal discounting (also called time discounting) refers to placing lessis the discounting of the value onof a good that might be received the further ininto the future it might be received.occurs.

Temporal discounting (also called time discounting) refers to placing less value on a good that might be received the further in future it might be received. 

Greaves, Hilary (2017) Discounting for public policy: Aa survey, Economics and philosophy, vol. 33, pp. 391–439.

Wikipedia (2021) Annual effective discount rate, Wikipedia.
The most common example is capital, which is normally discounted to account for the fact that if money is spent later, it can accumulate interest.

Wikipedia (2021) Social discount rate, Wikipedia.
A related concept in social decision making.

Greaves, Discounting for public policy: A survey

Temporal discounting (also called time discounting) is the discounting of the of the intrinsicrefers to placing less value of on a good that might be received the further into thein future it occurs.might be received. 

People often think that we should value goods in the future less than goods now. There are a variety of different reasons why we might discount the future: for instance, we might simply care less about the future than we do the present (this is known as pure time preference)preference). Alternately, we might care just as much about my future, but think that there is some probability that it will not be possible to reap the benefits at that time (for instance, I might care less about my personal income in 40 years, simply because there's a reasonable chance that I will be dead by then, and not able to enjoy the income). A variety of other reasons might apply, depending on the good under discussion.

Members of the effective altruism community have often argued against pure time discounting, and so for lower discounting of future welfare. This has ledcontributed to some to focuspeople focusing on issues relating to the long-run future.