Revisiting Social Discount Rate and its Calculating & Applying Approaches
Subject Areas :
1 -
Keywords: Discounting Social Discount Rate Public &, Private Sector,
Abstract :
In most inter temporal analysis in order to make current and future figures comparable, discounting is inevitable. It is applicable not only in private sector analysis but in public ones. But due to intrinsic differences among these two sectors (such as projects time horizon and intergeneration affairs, externalities, market failure and …) discount rate would be different in public sector as it is known as Social Discount Rate. It defined as the rate in which society evaluate current welfare/ consumption regarding to future one. The nature, scope and approaches to the social discount rate calculation and the countries experiences (including Iran) is the main theme of this article. Finally we led to some applied recommendations, as follows: Countries should take into account their own economic, social, institutional and social conditions in calculating discount rate. Finally, having the unique procedure at the national level in the field of choosing social discount rate is highly recommended for public sector institutions and organizations
دلالي اصفهاني، رحيم و رسول بخشي دستجردي و جعفر حسيني(1387)، بررسي نظري و تجربي نرخ ترجيح زماني: مطالعه موردي اقتصاد ايران(سال‌هاي 81-1351)، مجلة دانش و توسعه، سال پانزدهم، شمارة 25 ،صص 167-137.
عبدلي، قهرمان(1388)، تخمين نرخ تنزيل اجتماعي براي ايران، پژوهشنامه اقتصادي، سال نهم، شماره سوم، صص 156-137.
عبدلي، قهرمان و حسن حيدري(1388)، برآورد نرخ تنزيل مبتني بر نرخ خطر براي ايران و چند کشور منتخب، فصلنامه پژوهش‌هاي اقتصادي ايران، سال سيزدهم، شماره 38، صص 29-1.
Florio, Massimo and Emanuela Sirtor(2013), “The Social Cost of Capital: Recent Estimations for the EU Countries” Working Paper N. 03/2013, Centre for Industrial Studies (Milan).
Halicioglu, Ferda and Cevat Karatas(2011), “A social discount rate for Turkey” MPRA Paper, No. 32925, http://mpra.ub.uni-muenchen.de/32925/. 2011.
Lopez, Humberto(2008), “The Social Discount Rate: Estimates for Nine Latin American Countries”, The World Bank Policy Research Working Paper 4639.
Ramsey, Frank, P.(1928), “A Mathematical Theory of Saving”, Economic Journal 38:543–59,1928.
Zhuang, Juzhong and Zhihong Liang and Tun Lin and Franklin De Guzman(2007), “Theory and Practice in the Choice of Social Discount Rate for Cost-Benefit Analysis: A Survey”, ERD Working Paper Series, No9.4.
Zerbe, Richard O.(2005), “Should Moral Sentiments Be Incorporated into Benefit-Cost Analysis? An Example of Long-Term Discounting”, Policy Sciences 37(3–4):305–18.
Zerbe, Jr., R., and D., Dively(1994), Benefit-Cost Analysis: In Theory and Practice, New York: Harper Collins.
Evans, David J. and Haluk Sezer(2004), “Social Discount Rates for Six Major Countries”, Applied Economics Letters 11:557–60.
Henderson, Norman., and Ian Bateman(1995), “Empirical and Public Choice Evidence for Hyperbolic Social Discount Rates and the Implications for Intergenerational Discounting”, Environmental and Resource Economics, 5:413–23.
Lyon, Randolph M.(1990), “Federal Discount Rate Policy, the Shadow Price of Capital, and Challenges for Reforms”, Journal of Environmental Economics and Management 18:S29–S50.
European Commission(2014), Guide to Cost-Benefit Analysis of Investment Projects, Economic Appraisal Tool for Cohesion Policy 2014-2020.
Hepburn Cameron and Phoebe Koundouri and Ekaterini Panopoulou and Theologos Pantelidis(2009), Social Discountingunderuncertainty: Across-Countrycomparison, Journal of Environmental Economics and Management 57, 140–150.2009.
Pálinkó, Éva and Márta Szabó(2014), Application of Social Discount Rate in Public Projects, State Audit Office of Hungary(SAO).
Kazlauskien, Vilma(2015), Application of Social Discount Rate for Assessment of Public Investment Projects, Procedia - Social and Behavioral Sciences 213. 461 – 467.
Goulder, Lawrence H. and Roberton C. Williams(2012), The Choice of Discount Rate for Climate Change Policy Evaluation, Climate Change Economics, Vol. 3, No. 4. 1-18.
Weitzman, Martin L.(2010), Risk-adjusted gamma discounting, Journal of Environmental Economics and Management 60. 1–13.
Weitzman, Martin L.(2001), Gamma Discounting, American Economic Review, Vol. 91 No.1, 260-71.
Gollier, Christian and Martin L. Weitzman(2010), How Should the Distant Future be Discounted When Discount Rates are Uncertain?, Economics Letters 107. 350–353.
