The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Social Discount Rate

  • Tyler Cowen
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2549

Abstract

Economists use a social discount rate to evaluate future costs and benefits. To arrive at a suitable magnitude, market interest rates are adjusted for taxes, transactions costs, and risk. Over time the discount rate debate has become more complex. It is agreed that no single discount rate will apply to all choices, and that the proper discount rate will be context-dependent.

Keywords

Arrow, K. Cost–benefit analysis Crowding out Deadweight loss Environmental issues Gamma discounting Infrastructure investment Inter-generational policies Value of life Posner, R. Productivity of capital Risk Social discount rate Time preference Utility 
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Bibliography

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  5. Weitzman, M. 2001. Gamma discounting. American Economic Review 91: 260–271.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Tyler Cowen
    • 1
  1. 1.