Because of the uncertainty about how to model the growth process of our economy, there is still much confusion about which discount rates should be used to evaluate actions having long-lasting impacts, as in the contexts of climate change, social security reforms or large public infrastructures for example. In this paper, we take this critique seriously by assuming that the random walk of econo...

The assessment of investment projects by the net present value method presupposes that the discount rate and the project deadline are known. In literature, however, it is commonly accepted that generally the discount rate cannot be determined with sufficient accuracy. Moreover, the project deadline is generally subject to negotiations. In this paper, we develop a procedure for computing the pro...

We estimate discount rates of 555 subjects using a laboratory task and …nd that these individual discount rates predict inter-individual variation in …eld behaviors (e.g., exercise, BMI, smoking). The correlation between the discount rate and each …eld behavior is small: none exceeds 0.28 and many are near 0. However, the discount rate has at least as much predictive power as any variable in ou...

This study presents some evidence of discount rate selection on goodwill impairment testing under the new requirements of FRS 36. The selection of discount rates is believed to be an important key factor that affects the outcome of impairment assessment, especially when using the method of value in use. This study objectively examines the Singapore listed firm’s selection of discount rates disc...

Introduction Since the Stern Review (Stern 2007) and the debate it has sparked off, the discount rate has been at the center of heated discussions about climate policies. In the very long run, the discount rate makes a huge difference in the evaluation of policies. The following table (Table 1) shows the minimum return that a $1 investment for the future should have to be considered better than...

Using data from reorganization proposals filed by bankrupt Canadian firms, we estimate the discount rate implicit in the creditors’ reorganization decision. Using two approaches, a grid-search and an optimization algorithm, we estimate the implicit monthly discount rate in reorganization to be around 5 percent, which corresponds to an annual discount rate of 87 percent.

The mean discount rate for a simple stochastic model behaves asymptotically roughly like 1/ √ n in contrast to the usual geometric discounting in a deterministic model. AMS (2000) subject classifications. 60F99, 60J05, 60G42.

The sensitivity of the optimal control of carbon dioxide emissions to the specification of the social welfare function is systematically explored using the FUND model. Increasing risk aversion emphasises climate change damages relative to emission reduction costs, but at the same time increases the discount rate of consumption. Without international co-operation, the discount rate effect domina...

As a measure of how prosocial behavior depends on social distance, social discounting is defined as the decrease in generosity between the decision maker and the recipient as the social distance increases. While risk is a ubiquitous part of modern life, there is limited research on the relationship between risk and prosocial behavior. In the present experiment, we empirically test whether risk ...