Rates of discount past: a validation study of housing market-based very long discount rates

Olmo Silva and Nikodem Szumilo

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Giglio, Maggiori, and Stroebel (2015) provided seminal evidence for low, constant long-run discount rates by analysing housing leaseholds using proprietary data. While their results stand as best estimates of very long discount rates, their reliance on restricted access data is a major drawback at times of a 'replicability crisis' in economics. We conduct the first external replication exercise using newly available public administrative records from the UK covering the same period and geography as in the original study. Our headline finding is stark: the baseline results replicate – but some of their key robustness checks do not. In particular, while the basic correlation between lease lengths and price discounts holds, this association vanishes when controls for initial lease terms or building fixed effects (which had no effect in the original study) are added. We further show that finer maturity bins produce noisy estimates that are not fully consistent with a constant discount rate.

Keywords: discount rates; leaseholds; replication; real estate; housing markets (search for similar items in EconPapers)
JEL-codes: G12 Q54 R30 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:137709

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