Revisiting Social Discount Rate and its Calculating & Applying Approaches
Subject Areas :
1 -
Keywords: Discounting Social Discount Rate Public &, Private Sector,
Abstract :
In most inter temporal analysis in order to make current and future figures comparable, discounting is inevitable. It is applicable not only in private sector analysis but in public ones. But due to intrinsic differences among these two sectors (such as projects time horizon and intergeneration affairs, externalities, market failure and …) discount rate would be different in public sector as it is known as Social Discount Rate. It defined as the rate in which society evaluate current welfare/ consumption regarding to future one. The nature, scope and approaches to the social discount rate calculation and the countries experiences (including Iran) is the main theme of this article. Finally we led to some applied recommendations, as follows: Countries should take into account their own economic, social, institutional and social conditions in calculating discount rate. Finally, having the unique procedure at the national level in the field of choosing social discount rate is highly recommended for public sector institutions and organizations
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