An Empirical Investigation on the Social Time-Preference Rate for the United Kingdom

E Kula
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E Kula: Department of Economics and Manpower Studies, University of Ulster at Coleraine, Coleraine, County Londonderry BT52 1SA, Northern Ireland

Environment and Planning A, 1985, vol. 17, issue 2, 199-212

Abstract: In this paper, a social time-preference rate is derived for the United Kingdom on the basis of a conventional utility function. The model which the estimate is based upon is developed in a two-period analysis in which a representative individual is the central figure. The component parameters of this rate are: growth rate of real consumption, elasticity of marginal utility of consumption, and a pure time-discount rate derived on the basis of individuals' survival probabilities. Then each of these parameters is estimated separately with the final result of 3.65% which is very much in line with expectations of many economists.

Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:17:y:1985:i:2:p:199-212

DOI: 10.1068/a170199

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