Drupp, Moritz, Freeman, Mark Charles orcid.org/0000-0003-4521-2720, Groom, Ben et al. (1 more author) (2018) Discounting disentangled. American Economic Journal: Economic Policy. pp. 109-134. ISSN 1945-774X
Abstract
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.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details |
Dates: |
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Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > The York Management School |
Depositing User: | Pure (York) |
Date Deposited: | 10 Jan 2018 10:10 |
Last Modified: | 23 Jan 2025 00:13 |
Published Version: | https://doi.org/10.1257/pol.20160240 |
Status: | Published |
Refereed: | Yes |
Identification Number: | 10.1257/pol.20160240 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:125845 |
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