Discounting disentangled

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Discounting disentangled. / Drupp, Moritz A.; Freeman, Mark C.; Groom, Ben; Nesje, Frikk.

In: American Economic Journal: Economic Policy, Vol. 10, No. 4, 2018, p. 109.

Research output: Contribution to journal › Journal article › Research › peer-review

Harvard

Drupp, MA, Freeman, MC, Groom, B & Nesje, F 2018, 'Discounting disentangled', American Economic Journal: Economic Policy, vol. 10, no. 4, pp. 109. https://doi.org/10.1257/pol.20160240

APA

Drupp, M. A., Freeman, M. C., Groom, B., & Nesje, F. (2018). Discounting disentangled. American Economic Journal: Economic Policy, 10(4), 109. https://doi.org/10.1257/pol.20160240

Vancouver

Drupp MA, Freeman MC, Groom B, Nesje F. Discounting disentangled. American Economic Journal: Economic Policy. 2018;10(4):109. https://doi.org/10.1257/pol.20160240

Author

Drupp, Moritz A. ; Freeman, Mark C. ; Groom, Ben ; Nesje, Frikk. / Discounting disentangled. In: American Economic Journal: Economic Policy. 2018 ; Vol. 10, No. 4. pp. 109.

Bibtex

@article{b7ea272f15f34324a8c3794b2b3e942d,
title = "Discounting disentangled",
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.",
author = "Drupp, {Moritz A.} and Freeman, {Mark C.} and Ben Groom and Frikk Nesje",
year = "2018",
doi = "10.1257/pol.20160240",
language = "English",
volume = "10",
pages = "109",
journal = "American Economic Journal: Economic Policy",
issn = "1945-7731",
publisher = "American Economic Association",
number = "4",

}

RIS

TY - JOUR

T1 - Discounting disentangled

AU - Drupp, Moritz A.

AU - Freeman, Mark C.

AU - Groom, Ben

AU - Nesje, Frikk

PY - 2018

Y1 - 2018

N2 - 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.

AB - 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.

U2 - 10.1257/pol.20160240

DO - 10.1257/pol.20160240

M3 - Journal article

VL - 10

SP - 109

JO - American Economic Journal: Economic Policy

JF - American Economic Journal: Economic Policy

SN - 1945-7731

IS - 4

ER -

ID: 248161730