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Discounting Disentangled

delete2018-11-01
delete175
delete
OA
AI
M
Moritz A. Drupp *
M
Mark Freeman
G
Groom, Ben
F
Frikk Nesje
DOI：10.1257/pol.20160240delete
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Abstract

Abstract

En 中文
The economic values of investing in long-term public projects are highly sensitive to the social discount rate (SDR). We surveyed over 200 experts to disentangle disagreement on the risk-free SDR into its component parts, including pure time preference, the wealth effect, and return to capital. We show that the majority of experts do not follow the simple Ramsey Rule, a widely used theoretical discounting framework, when recommending SDRs. Despite disagreement on discounting procedures and point values, we obtain a surprising degree of consensus among experts, with more than three-quarters finding the median risk-free SDR of 2 percent acceptable.
Keywords:
DISTANT FUTURE
SOCIAL COST
ECONOMICS
RATES
VALUATION
BENEFITS

Journal

A
American Economic Journal-Macroeconomics
IF:
5.7
Papers:
1.4K
Citations:
4.4K

Organization

L
London School Economics and Political Science
Scholars:
3.8K
Papers: 3.2K
Citations: 40
U
university of hamburg
Scholars:
3.7W
Papers: 2.9W
Citations: 30
U
university of york - uk
Scholars:
1.5W
Papers: 1.5W
Citations: 15
U
university of london
Scholars:
21.5W
Papers: 19.7W
Citations: 305
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