The Role of the Discount Rate in Cost–Benefit Analysis Between Theory and Practice: A Comparative Survey

2013 ◽  
Vol 4 (1) ◽  
pp. 59-71
Author(s):  
Felice Simonelli
Keyword(s):  
Discount Rate ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Theory And Practice ◽  
Benefit Analysis ◽  
Economic Literature ◽  
Institutional Practice ◽  
Two Samples ◽  
Regulatory Decisions

This study focuses on the role of the discount rate in cost–benefit analysis (CBA) of regulation, providing a systematic investigation into regulatory practice vis–à–vis the existing economic theories. In the first part, a quick survey of the main economic literature on the social discount rate (SDR) is presented. In the second part, the current institutional practice is investigated, firstly comparing the recommendations on discounting issued by institutional actors in the US (Office of Management Budget, Environmental Protection Agency) and the EU (Commission), and secondly examining the SDRs adopted in two samples of CBAs selected among Regulatory Impact Analyses of US EPA and Impact Assessments of EU Directorate–General for the Environment. A gap exists between economic theory and institutional practice in the selection of the SDR. Regulatory decisions which are based on CBA reflect the most workable economic literature on discounting rather than the most theoretically consistent one, thus yielding less reliable and less robust results. Scholars who aim at improving the quality of rule–making and at fostering the application of CBA in regulatory decisions should improve the “operational validity” of their research, thus providing practitioners with methods that are both consistent and workable.

Decision rules and regulatory reform

1982 ◽  
Vol 2 (4) ◽  
pp. 379-394 ◽  
Author(s):  
Stephen H. Linder
Keyword(s):  
Cost Benefit Analysis ◽  
Decision Rules ◽  
Cost Benefit ◽  
Regulatory Reform ◽  
Analytical Framework ◽  
The United States ◽  
Benefit Analysis ◽  
Costs And Benefits ◽  
Regulatory Decisions

ABSTRACTThe regulation of risks to health and the environment in the United States is currently undergoing serious criticism for its impact on the recession economy. Attempts to diminish health risks by placing stringent limitations on potentially harmful substances are thought to be excessively expensive and ineffective. To remedy this problem, basic reforms in the way these regulations are fashioned have been proposed. Perhaps the best known is cost-benefit analysis. Nevertheless, there are a number of areas where agencies purposely avoid making tradeoffs between costs and benefits and instead assign priorities among levels and types of benefits. However, despite a considerable literature examining the merits of making tradeoffs in regulatory decisions, little attention has been given to the disparate premises of the tradeoff and no-tradeoff rules and how the choice of decision rules determines the role of cost considerations in agency decision making. This paper not only examines these issues, but develops an analytical framework for restructuring the choice between rules. Instead of abolishing the no-tradeoff rules, the analytical framework proposed here can be used to generate a compromise rule which permits partial tradeoffs under certain well-defined circumstances.

Hostile Takeovers and Anti-takeover Defenses in the Russian Corporate Market

2007 ◽  
pp. 70-84 ◽  
Author(s):  
E. Demidova
Keyword(s):  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Benefit Analysis ◽  
Costs And Benefits ◽  
Hostile Takeovers ◽  
Russian Market ◽  
Takeover Defenses ◽  
The Cost ◽  
European Markets

This article analyzes definitions and the role of hostile takeovers at the Russian and European markets for corporate control. It develops the methodology of assessing the efficiency of anti-takeover defenses adapted to the conditions of the Russian market. The paper uses the cost-benefit analysis, where the costs and benefits of the pre-bid and post-bid defenses are compared.

Rationalisation of non-sterile latex disposable gloves in clinical settings – a brief study using the purchase of expertise consultancy model

2003 ◽  
Vol 4 (1) ◽  
pp. 10-19
Author(s):  
Duncanson V
Keyword(s):  
Secondary Care ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Clinical Nurse Specialist ◽  
Small Study ◽  
Clinical Settings ◽  
Nurse Specialist ◽  
Benefit Analysis ◽  
Clinical Nurse

T his article describes a small study aimed at making a purchasing recommendation to the purchasing manager, providing a cost-benefit analysis of the most commonly used brands of non-sterile latex examination gloves. One of the nine makes of glove tested remained consistent with the agreed criteria for assessment and, if introduced as the only option available, would result in a saving of $15,150 per annum on Site A of a recently merged secondary care Trust. Also, the importance of the consultancy role of the clinical nurse specialist in improving practice was demonstrated.

Cost-Benefit Analysis: Theory and Practice.

Economica ◽  
1974 ◽  
Vol 41 (163) ◽  
pp. 351
Author(s):  
Tony Flowerdew ◽  
Ajit K. Dasgupta ◽  
D. W. Pearce
Keyword(s):  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Theory And Practice ◽  
Benefit Analysis ◽  
Analysis Theory

Show Me the Money: Cost-Benefit Analysis in the Work Environment

2005 ◽  
Vol 15 (3) ◽  
pp. 261-276 ◽  
Author(s):  
Charles Levenstein ◽  
Mary Lee Dunn
Keyword(s):  
Public Policy ◽  
Work Environment ◽  
Policy Making ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Theory And Practice ◽  
Benefit Analysis ◽  
Public Policy Making

During the last several decades, Cost-Benefit Analysis (CBA) has become a widely used technique in public policy-making. This review examines CBA from perspectives of both advocates and critics; it looks at its theory and practice, its purported advantages and shortcomings in application. It also proposes several ways in which the process can be made more accountable.

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