scholarly journals Multiple Discount Rates for Evaluating Public Forestry Investments

1979 ◽  
Vol 55 (1) ◽  
pp. 17-20 ◽  
Author(s):  
Bennett B. Foster
Keyword(s):  
Social Welfare ◽  
Empirical Evidence ◽  
Discount Rate ◽  
High Rate ◽  
Discount Rates ◽  
Investment Evaluation ◽  
Forestry Investments ◽  
Low Rate ◽  
Multiple Step

The critical nature of the discount rate in public forestry investment evaluation is generally recognized, as is the philosophical conflict between the need for a high rate which reflects current economic and social realities, and a low rate which assures permanence and the attainment of long-term social welfare goals. Others have suggested a dual rate approach for solving this issue. The rationale leading to their dual-rate concept can be expanded into a multiple-rate concept. In addition, empirical evidence supports a multiple rate concept: one in which rates would be influenced by the duration of investment and approximated by a formula-based continuum or a multiple-step schedule. No attempt is made to set specific rates; however, there is evidence that rates above 8% are reasonable for only a decade or two, rates above 5% reasonable for durations up to approximately 50 years, and lower rates being reasonable for longer durations.

S Corporation Valuations—An Analysis in Search of a Solution

2007 ◽  
Vol 26 (4) ◽  
pp. 127-136 ◽  
Author(s):  
Larry J. Kasper
Keyword(s):  
Empirical Evidence ◽  
Cash Flow ◽  
Discount Rate ◽  
Tax Rates ◽  
Discount Rates ◽  
Discounted Cash Flow

Abstract Until now, the approaches to valuing S corporations have focused on two main aspects: differences in tax rates for subchapter S and C corporations and the appropriate discount rates to use in valuing them. The problem lies with the fact that traditional earnings methods of valuation, including discounted cash flow, are faced with the dilemma of having a “pretax,” that is, untaxed, cash flow passed through to the S corporation shareholder that should be discounted at the post-corporate, but preshareholder, tax discount rate. Empirical evidence is critically reviewed herein.

scholarly journals The Dilemmas of Public Vs. Private Goods Discounting for Long-Term Investment Appraisal: The Puzzle of Citizen and Consumer Approaches to Valuation

2020 ◽  
Vol 20 (2) ◽  
pp. 114-133
Author(s):  
Monika Foltyn-Zarychta
Keyword(s):  
Discount Rate ◽  
Contingent Valuation Method ◽  
Discount Rates ◽  
Public And Private ◽  
Private Goods ◽  
Explanatory Variables ◽  
Investment Appraisal ◽  
Intertemporal Preferences ◽  
Use Values

Abstract Research background: An investment appraisal applies a single discount rate across all effects. However, this may be insufficient for heterogenous environmental impacts, mixing private and public goods as well as use and non-use values, where individuals may have multiple intertemporal preferences due to their duality to act as consumer or citizen. Purpose: The paper aims at identifying the scope of discrepancies in the level of discount rate for public and private as well as use-and non-use investment gains. Research methodology: The contingent valuation method is used to elicit stated discount rates for 2 hypothetical investments: environmental or financial gains to distinguish between public and private domain accompanied by two time-frames: short (use values) and long (non-use values). Results: The discount rate for the environment is lower than for money. It is also lower for the long-term horizon in comparison with the short-term perspective. The discrepancies are observed also for explanatory variables in respect to a socio-economic profile and attitude characteristics. Novelty: The paper adds to the discussion on valuation discrepancies between self-interested consumers and socially oriented citizens. The scarcity of previous research examining discount rates for public/private goods as well as the short/long-time horizon make the results relevant for public policy dealing with climate change and environmental protection, providing an insight into individual intertemporal preferences.

scholarly journals MON-LB110 A Phase 2 Evaluation of a Ready-To-Use Liquid Stable Continuous Subcutaneous Glucagon Infusion for the Treatment of Hypoglycemia Associated Autonomic Failure

2020 ◽  
Vol 4 (Supplement_1) ◽  
Author(s):  
Jeremy H Pettus ◽  
Samer Nakhle ◽  
Fernando Ovalle ◽  
Michael Roehrhoff Rickels ◽  
Guillermo Enrique Umpierrez ◽  
...  
Keyword(s):  
Autonomic Failure ◽  
High Rate ◽  
Phase 2 ◽  
Hormone Response ◽  
Percent Change ◽  
Long Term Follow Up ◽  
To Receive ◽  
Low Rate

Abstract OBJECTIVE:A novel, ready-to-use, liquid stable, continuous subcutaneous glucagon infusion (CSGI; Xeris Pharmaceuticals) was evaluated for the treatment of adults with type 1 diabetes (T1D) with documented Hypoglycemia Associated Autonomic Failure (HAAF). METHOD:This was a Phase 2 prospective, multi-center, randomized, placebo-controlled, double-blind, parallel trial in T1D adults with documented HAAF, defined as Gold Scale Score ≥4. Subjects were randomized in a 1:1:1 ratio to receive 4 weeks of continuous treatment (via Omnipod pump) with high rate CSGI (80mcg/hour), low rate CSGI, (20mcg/hour) or placebo (matched infusion rates for low and high rate CSGI). The primary endpoint evaluated at 4 weeks was the percent change of the epinephrine hormone response after 30 minutes of induced hypoglycemia. Epinephrine levels and hypoglycemia symptoms were recorded following a stepwise hypoglycemia clamp, and results compared between study treatment arms. Following the first four weeks, subjects continued for an additional 24 weeks to assess their epinephrine hormone response to hypoglycemia measured at 3 months post-treatment (16 weeks), and 6 months post-treatment (28 weeks). RESULTS:Forty-nine subjects were randomized to receive treatment with high rate CSGI (n=15), low rate CSGI (n=18), or matching placebo (n=16). At the end of study treatment, there were no statistically significant differences between the treatment arms for percent change of epinephrine hormone response during a stepwise hypoglycemia clamp (CSGI vs. placebo; p=0.160). As a result, long-term follow-up of the subjects was stopped early. The long-term follow-up data collected to date will be reported separately. The administration of low and high rate CSGI was associated with mild to moderate nausea (5.9%, 20%, respectively) and vomiting (11.8%, 13.3%, respectively) that was self-limited and required no additional intervention. In this 4-week assessment, CSGI was not associated with pain nor significant injection site reactions, and no SAEs related to CSGI were reported. CONCLUSION:In this proof-of-concept study, CSGI did not demonstrate statistically significant improvements in plasma epinephrine concentration when compared to placebo at 4 weeks. While there were positive epinephrine and improved hypoglycemia awareness responses observed in some subjects, the equivocal efficacy results observed may be explained by the unanticipated and incomplete elimination of hypoglycemia on CSGI therapy, and those on placebo therapy experienced hypoglycemia improvement. CSGI can be safely used with concomitant diabetes medications, and there were no SAEs related to CSGI. The 4-week administration of both low and high rate CSGI was safe and well tolerated.

Predicting Net Discount Rates: A Comparison of Professional Forecasts, Time-series Forecasts and Traditional Methods

2010 ◽  
Vol 21 (2) ◽  
pp. 147-171 ◽  
Author(s):  
Matthew J. Cushing ◽  
David I. Rosenbaum
Keyword(s):  
Time Series ◽  
Random Walk ◽  
Interest Rate ◽  
Discount Rate ◽  
Discount Rates ◽  
Class Of Estimators ◽  
And Performance ◽  
Two Alternatives ◽  
Better Than

Abstract Previous research proposed two future net discount rate estimators that improved on naïve long-term average and random walk estimators. The proposed estimators were superior in the class of estimators that used only current and past observations on net discount rates. In this paper we consider two extensions. First we examine whether professional forecasts perform significantly better than the two alternatives. Second, we examine the properties and performance of multivariate estimators that account for the potentially differing time-series behaviors of the underlying wage growth and interest rate series.

scholarly journals Nondogmatic Social Discounting

2020 ◽  
Vol 110 (3) ◽  
pp. 760-775 ◽  
Author(s):  
Antony Millner
Keyword(s):  
Social Welfare ◽  
Discount Rate ◽  
Time Preferences ◽  
Climate Mitigation ◽  
Social Discount Rate ◽  
Public Projects ◽  
Social Time ◽  
Long Run ◽  
Social Discounting

The long-run social discount rate has an enormous effect on the value of climate mitigation, infrastructure projects, and other long-term public policies. Its value is however highly contested, in part because of normative disagreements about social time preferences. I develop a theory of “nondogmatic” social planners, who are insecure in their current normative judgments and entertain the possibility that they may change. Although each nondogmatic planner advocates an idiosyncratic theory of intertemporal social welfare, all such planners agree on the long-run social discount rate. Nondogmatism thus goes some way toward resolving normative disagreements, especially for long-term public projects. (JEL D61, H43)

The Term Structure of Interest Rates and the Evaluation of Forestry Investments: A Note

1988 ◽  
Vol 12 (4) ◽  
pp. 256-258
Author(s):  
F. Christian Zinkhan
Keyword(s):  
Interest Rates ◽  
Term Structure ◽  
Discount Rate ◽  
Net Present Value ◽  
Present Value ◽  
Term Structures ◽  
Forestry Investments ◽  
The Relationship

Abstract The forestry literature generally assumes that the appropriate discount rate to be used in the estimation of a given investment's net present value is the same over its lifetime. However, the values of many alternative investments such as stocks and bonds often reflect term structures that are not flat. That is, the relationship between the number of years to maturity of an investment and that investment's required rate of return is often a significant consideration. This note suggests a procedure for incorporating a consideration of the term structure of interest rates into the determination of a discount rate specific to each annual net cash flow associated with a given long-term forestry investment. Using an actual 10-year case analysis, it was found that the valuation of a timberland tract varied by approximately 11%, depending upon whether or not the term structure of interest rates was recognized. South. J. Appl. For. 12(4):256-258.

scholarly journals The Role of Discounting in Energy Policy Investments

Energies ◽  
2021 ◽  
Vol 14 (19) ◽  
pp. 6055
Author(s):  
Gabriella Maselli ◽  
Antonio Nesticò
Keyword(s):  
Energy Policy ◽  
Discount Rate ◽  
Cash Flows ◽  
Quality Parameter ◽  
Economic Evaluations ◽  
Discount Rates ◽  
Sustainable Investment ◽  
Climate Neutrality ◽  
Over Time

For informing future energy policy decisions, it is essential to choose the correct social discount rate (SDR) for ex-ante economic evaluations. Generally, costs and benefits—both economic and environmental—are weighted through a single constant discount rate. This leads to excessive discounting of the present value of cash flows progressively more distant over time. Evaluating energy projects through constant discount rates would mean underestimating their environmental externalities. This study intends to characterize environmental–economic discounting models calibrated for energy investments, distinguishing between intra- and inter-generational projects. In both cases, the idea is to use two discounting rates: an economic rate to assess financial components and an ecological rate to weight environmental effects. For intra-generational projects, the dual discount rates are assumed to be constant over time. For inter-generational projects, the model is time-declining to give greater weight to environmental damages and benefits in the long-term. Our discounting approaches are based on Ramsey’s growth model and Gollier’s ecological discounting model; the latter is expressed as a function of an index capable of describing the performance of a country’s energy systems. With regards to the models we propose, the novelty lies in the calibration of the “environmental quality” parameter. Regarding the model for long-term projects, another innovation concerns the analysis of risk components linked to economic variables; the growth rate of consumption is modelled as a stochastic variable. The defined models were implemented to determine discount rates for both Italy and China. In both cases, the estimated discount rates are lower than those suggested by governments. This means that the use of dual discounting approaches can guide policymakers towards sustainable investment in line with UN climate neutrality objectives.

Sign in / Sign up

Export Citation Format

Share Document