Just give me a number! - Practical values for the social discount rate

• 成果类型: Article
• 署名作者: Moore, MA; Boardman, AE; Vining, AR; Weimer, DL; Greenberg, DH
• 署名单位: Simon Fraser University; University of British Columbia; University of Wisconsin System; University of Wisconsin Madison; University System of Maryland; University of Maryland Baltimore County
• 刊物名称: JOURNAL OF POLICY ANALYSIS AND MANAGEMENT
• ISSN/ISSBN: 1520-7068
• DOI: 10.1002/pam.20047
• 发表日期: 2004
• 页码: 789-812
• 关键词: COST-BENEFIT-ANALYSIS; time preference; public-investment; equity premium; rate policy; EFFICIENCY; CHOICE; light

摘要

A major reason the quality of cost-benefit analysis (CBA) varies widely is inconsistent use of the social discount rate (SDR). This article offers guidance about the choice of the SDR. Namely, we recommend the following procedures: If the project is intragenerational (does not have effects beyond 50 years) and there is no crowding out of private investment, then discount all flows at 3.5 percent; if the project is intragenerational and there is some crowding out of investment, then weight investment flows by the shadow price of capital of 1.1 and then discount at 3.5 percent; if the project is intergenerational and there is no crowding out of investment, then use a time-declining scale of discount rates; if the project is intergenerational and investment is crowded out, then convert investment flows during the first 50 years to consumption equivalents using a shadow price of 1.1, and then discount all of these flows at 3.5 percent, and discount all flows after the 50th year using time-declining rates. We then compare current discounting practices of U.S. federal agencies with our estimates. Consistent use of the recommended rates would eliminate arbitrary choices of discount rates and would lead to better public sector decision-making. (C) 2004 by the Association for Public Policy Analysis and Management.