Arbeitspapier

Discounting disentangled

As the most important driver of long-term project evaluation, from climate change policy to infrastructure investments, the social discount rate (SDR) has been subject to heated debate among economists. To uncover the extent and sources of disagreement, we report the results of a survey of over 200 experts that disentangles the long-term SDR into its component parts: the pure rate of time preference, the wealth effect, and the real risk-free interest rate. The mean recommended SDR is 2.27 percent, with a range from 0 to 10 percent. Despite disagreement on point values, more than three-quarters of experts are comfortable with the median SDR of 2 percent, and over 90 percent find an SDR in the range of 1 to 3 percent acceptable. Our disentangled data reveal that only a minority of responses are consistent with the Ramsey Rule, the theoretical framework dominating discounting policy. Instead, experts recommend that governmental discounting guidance should be updated to deal with uncertainty, relative prices, and alternative ethical approaches.

Sprache
Englisch

Erschienen in
Series: Memorandum ; No. 20/2015

Klassifikation
Wirtschaft
Project Evaluation; Social Discount Rate
Allocative Efficiency; Cost-Benefit Analysis
Environmental Economics: Government Policy
Thema
Social discount rate
project appraisal
expert opinions
disagreement

Ereignis
Geistige Schöpfung
(wer)
Drupp, Moritz A.
Freeman, Mark C.
Groom, Benjamin
Nesje, Frikk
Ereignis
Veröffentlichung
(wer)
University of Oslo, Department of Economics
(wo)
Oslo
(wann)
2015

Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Drupp, Moritz A.
  • Freeman, Mark C.
  • Groom, Benjamin
  • Nesje, Frikk
  • University of Oslo, Department of Economics

Entstanden

  • 2015

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