Social Discount Rates

22 Pages Posted: 27 Mar 2008

See all articles by Joice Valentim

Joice Valentim

University of São Paulo (USP) - Ribeirão Preto Medical School

Mauricio Prado

Copenhagen Business School

Date Written: March 26, 2008

Abstract

A social time preference methodology derived from Feldstein (1965) is applied to calculate social discount rates across 167 countries and across time from 2005-2050 for a country case (Brazil). This attempt seeks to compute comparable figures from a homogeneous dataset and provides a ready-to-use framework for computing the social discount rate. Social projects are important for stimulating economic development, especially in developing economies. Because there is no consensus in the literature on how to discount social investments, the quest for a proper measure of discounting seems quite relevant. Since social discounting allows for a better allocation of resources, this is a critical issue for the public sector.

Keywords: social discount rate, allocative effciency, cost-benefit analysis, project evaluation, general welfare, economic evaluation of social programs

JEL Classification: D61, H43, I10, I31, Q51

Suggested Citation

Valentim, Joice and Prado, Mauricio, Social Discount Rates (March 26, 2008). Available at SSRN: https://ssrn.com/abstract=1113323 or http://dx.doi.org/10.2139/ssrn.1113323

Joice Valentim

University of São Paulo (USP) - Ribeirão Preto Medical School ( email )

Rua Luciano Gualberto, 315
São Paulo
Brazil

Mauricio Prado (Contact Author)

Copenhagen Business School ( email )

Porcelaenshaven 16A
1.91
Frederiksberg, DK - 2000
Denmark
38155635 (Phone)
38152576 (Fax)

HOME PAGE: http://sf.cbs.dk/prado

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