We assess the impact of institutions on Chinese firms’ corporate investment in an investment Euler equation framework. We allow the variables measuring institutions to affect the rate at which firm managers discount future investment payoffs. Applying generalized method of moments estimators to large samples of Chinese firms, we estimate the stochastic discount rates derived from actual investm...

A Flexible Test for Present Bias and Time Preferences Using Land-Lease Contracts When agents have present bias, they discount more between now and the next period than between period t (> 1) and t + 1. How fast the future discount rate (evaluated today) decays is an empirical question. We show that the discount function can be non-parametrically identified with contracts that specify payments t...

A recent survey by Brookshire, et. al., (2006) suggests that forensic economists are mixed in their use of current versus historical data to estimate future net discount rates.1 Typically the choice is between a long-term average or simply the current prevailing rate.2 Cushing and Rosenbaum (2006) proposed an estimator that optimally uses the information in the past behavior of net discount rat...

It has been suggested that the long-term discount rate for environmental goods should decrease at longer delays. One justification for this suggestion is that human judgments support it. This article presents an experiment showing that judgments concerning discount rates are internally inconsistent. These results point to potential problems with the use of judgments referenda for determining di...

When collusive agreements are illegal, oligopolies must rely on the threat of future price wars to sustain collusion. If firms’ objective is to maximize the present value of profits, the shadow of that threat changes with the interest rate. That is, the interest rate determines how much firms discount the future, and this affects the level of collusion that can be supported. In an environment o...

Discount rates were estimated for Limited Resource Woodland Owners (LRWOs) in North Carolina and Virginia, using a survey that asked landowners to choose between two harvesting scenarios with different payment amounts and rotation lengths. Our innovative sampling frame resulted in a more diverse set of respondents, with high proportions of minority and small woodland owners. The estimated annua...

Although the classical dividend discount model (DDM) is a wellknown and widely used model in evaluating the intrinsic price of common stock, the practical pattern of dividends, required rate of return or growth rate of dividend do not generally coincide with any of the model’s assumptions. It is just the opportunity to develop a fuzzy logic system that takes these vague parameters into account....

SUMMARY Economists assess dollar costs and benefits in the future by discounting them. Each cost or benefit is multiplied by a discount factor appropriate to the time when it occurs, and then total discounted costs are subtracted from total discounted benefits to get net present value. The rate by which the discount factor declines over time is the discount rate. Economists also apply discounti...

To justify substantial emission reductions, recent literature on cost-benefit analysis of climate change suggests discounting environment consumption with an environmental discount rate instead of a consumption discount rate that is usually used in cost-benefit analysis. The present study clarifies that whether or not this dual-rate discounting approach succeeds in justifying substantial emissi...

BACKGROUND The present study aimed to provide better insight on methodological issues related to time preference studies, and to estimate private and social discount rates, using a rigorous systematic review and meta-analysis. METHODS We searched PubMed, EMBASE and Proquest databases in June 2013. All studies had estimated private and social time preference rates for health outcomes through s...