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Estimation of the environmental discount rate for Colombia

Author

Listed:
  • Francisco Correa Restrepo

    (Grupo de Economía Aplicada –GEA–, Programa de economía, Universidad de Medellín)

Abstract

The main purpose of this article is to describe and apply a methodology to estimate the discount rate on long-term projects, such as those related to environmental conservation and global climate change, for Colombia. The applied methodology is known as gamma discount. For the application of this method, a survey of 120 Colombian economists was conducted. This yielded a much smaller discount rate than the social rate of discount typically used in the economic evaluation of domestic long-term projects. Additionally, the obtained estimations allow verifying the decline in time of such a discount rate

Suggested Citation

  • Francisco Correa Restrepo, 2008. "Estimation of the environmental discount rate for Colombia," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 69, pages 141-162, Julio-Dic.
    • Handle: RePEc:lde:journl:y:2008:i:69:p:141-162
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    File URL: https://revistas.udea.edu.co/index.php/lecturasdeeconomia/issue/view/81
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    More about this item

    Keywords

    discount rate; intertemporal preferences; environmental impacts; cost-benefit analysis; uncertainty.;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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