Social Discounting Under Uncertainty: A cross-country comparison

Cameron Hepburn (), Phoebe Koundouri (), Ekaterini Panopoulou and Theologos Pantelidis

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: Recent research suggests that social cost-benefit analysis should be con- ducted with a declining discount rate. For instance, Newell and Pizer [23] show that the U.S. certainty-equivalent discount rate declines through time, using a simple autoregressive model of U.S. interest rates. This paper extends that line of research, estimating both autoregressive and regime-switching models of real interest rates to determine certainty- equivalent discount rates in Australia, Canada, Germany and the United Kingdom. It is found that the regime-switching model is a better model of past interest rate behavior for all four countries. This model tends to produce a more rapid decline in certainty-equivalent discount rates. The paper provides applications to the economics of climate change and nuclear power.

Keywords: discounting; uncertainty; regime-switching models; climate change policy; nuclear power (search for similar items in EconPapers)
Date: 2006-11-16
Note: Length:
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://www.tcd.ie/triss/assets/PDFs/iiis/iiisdp177.pdf (application/pdf)

Related works:
Journal Article: Social discounting under uncertainty: A cross-country comparison (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iis:dispap:iiisdp177

Access Statistics for this paper

More papers in The Institute for International Integration Studies Discussion Paper Series from IIIS 01. Contact information at EDIRC.
Bibliographic data for series maintained by Maeve ().