The Case for Declining Long-Term Discount Rates in the Evaluation of Flood-Defence Investments

This chapter aims to provide a unified theoretical foundation to the term structure of discount rates. To do this the chapter develops a benchmark model based on two assumptions: individual preferences toward risk, and the nature of the uncertainty over economic growth. Previously, it was shown that constant relative risk aversion, combined with a random walk for the growth of log consumption, yields a flat term structure for efficient discount rates. In this chapter, these two assumptions are relaxed by using a stochastic dominance approach. Stochastic models of economic growth with mean-reversion, Markov switches, and parametric uncertainty all exhibit some forms of positive statistical dependence of successive growth rates. Because this tends to magnify the long-term risk, it is the driving force of the decreasing nature of the term structure.

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The Environmental Legacy of Imperial China

The China Quarterly ◽

10.1017/s0305741000051328 ◽

1998 ◽

Vol 156 ◽

pp. 733-756 ◽

Cited By ~ 18

Author(s):

Mark Elvin

Keyword(s):

Social Economic ◽

Modern World ◽

History Of ◽

Imperial China ◽

Environmental Legacy ◽

Flood Defence ◽

Cereal Cultivation

China's long-term history – social, economic, political, and intellectual – has been interwoven from the start with its environment. In counterposed fashion, the history of the Chinese environment has been entwined with that of anthropogenic forces. The Chinese landscape was one of the most transformed in the pre-modern world as the result of its reshaping for cereal cultivation, re-engineering by hydraulic works for drainage, irrigation and flood-defence, and deforestation for the purposes of clearance and the harvesting of wood for fuel and construction.

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Social thinking capital: Individual discount ratewhen contributing to merit and public goods

Voprosy Ekonomiki ◽

10.32609/0042-8736-2020-11-47-68 ◽

2020 ◽

pp. 47-68

Author(s):

V. V. Karacharovskiy

Keyword(s):

Public Goods ◽

Social Bonds ◽

Discount Rates ◽

Mass Survey ◽

Investment Projects ◽

Social Thinking ◽

The Social

The hypothesis of declining individual discount rates for socially significant investments as compared to the rates for socially neutral ones confirmed based on a mass survey with using hypothetical situations on investing by the individuals the lottery prize to long-term social bonds. It is shown that there exists a special type of asset in the form of additional part of capital advanced to investment projects which arises for socially significant projects from the fact that people are ready to vote for their financing at a lower rate. The conclusions are drawn about the value of the considered type of asset for the case of Russia, the social base through which it can be accumulated and its differences for merit and public goods of various types. The study was conducted on the basis of a Russian national quota sample.

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Discount Rates for Long-Term Projects: The Cost of Capital and Social Discount Rate Compared

SSRN Electronic Journal ◽

10.2139/ssrn.2505150 ◽

2014 ◽

Author(s):

Seth Armitage

Keyword(s):

Discount Rate ◽

Cost Of Capital ◽

Discount Rates ◽

Social Discount Rate ◽

The Cost

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Discount Rates and Environmental Conservation

Environmental Conservation ◽

10.1017/s0376892900001387 ◽

1975 ◽

Vol 2 (3) ◽

pp. 199-201 ◽

Cited By ~ 9

Author(s):

D. R. Helliwell

Keyword(s):

Agricultural Land ◽

Environmental Conservation ◽

Discount Rates ◽

Alternative Method ◽

Investment Income ◽

Lending Rates

The use of current money-lending rates as the basis for economic calculations involving long-term assets such as growing timber, agricultural land, or species of wildlife, is unrealistic and can be very damaging to the interests of the environment. An alternative method, using an assessment of risks together with an assessment of the expected ratio of investment: income, is proposed.

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Short-Term and Long-Term Discount Rates for Commercial Real Estate

SSRN Electronic Journal ◽

10.2139/ssrn.3315679 ◽

2019 ◽

Author(s):

Carmelo Giaccotto ◽

Erasmo Giambona ◽

Yanhui Zhao

Keyword(s):

Real Estate ◽

Commercial Real Estate ◽

Discount Rates ◽

Short Term

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Decision making does not benefit from using a foreign language: Evidence from cognitive reflection effects on intertemporal choice.

10.31219/osf.io/vhp86 ◽

2020 ◽

Author(s):

Michal Bialek ◽

Artur Domurat ◽

Mariola Paruzel-Czachura ◽

Rafal Muda

Keyword(s):

Decision Making ◽

Foreign Language ◽

Decision Maker ◽

Intertemporal Choice ◽

Reference Points ◽

Discount Rates ◽

Negative Effects ◽

Cognitive Reflection ◽

Intertemporal Choices

Intertemporal choice requires to decide between smaller sooner and larger later payoffs, and is captured by discount rates. Across two preregistered experiments we found no evidence that using a foreign language benefitted intertemporal choices. On the contrary, there was some evidence of stronger discounting when a foreign language was used. Our results confirm that more reflective individuals tend to discount less strongly, and their intertemporal choices are also more consistent across different reference points and perspectives. In turn, this allows for greater consistency in long-term planning, benefitting a decision maker. Thinking in a foreign language did not affect such consistency, and may actually have negative effects for reflective people. Finally, although our findings hint that the benefits of cognitive reflection may be reduced when using a foreign language. This raises the questions as to why and how using a foreign language helps only some individuals, and in some decisions.

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