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A social discount rate for France

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  • David Evans

Abstract

Each of the member countries of the European Union should, ideally, employ the same approach to measuring a discount rate for application in the appraisal of social projects. This, however, is far from the case! The German rate is based on financial market data, the British measure reflects social time preference and the French rate is usually based on the marginal product of capital. While the German and British rates are similar in value, the French rate of 8% is over twice as high! In this paper, a discount rate based on social time preference is estimated for France and the policy implications of the result are then considered. The main finding is that the real rate of discount would fall to less than half its current level.

Suggested Citation

  • David Evans, 2004. "A social discount rate for France," Applied Economics Letters, Taylor & Francis Journals, vol. 11(13), pages 803-808.
    • Handle: RePEc:taf:apeclt:v:11:y:2004:i:13:p:803-808
    DOI: 10.1080/1350485042000254638
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    References listed on IDEAS

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    1. Neal Blue, E. & Tweeten, Luther, 1997. "The estimation of marginal utility of income for application to agricultural policy analysis," Agricultural Economics, Blackwell, vol. 16(3), pages 155-169, August.
    2. R. A. Sharma & M. J. McGregor & J. F. Blyth, 1991. "The Social Discount Rate For Land‐Use Projects In India," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(1), pages 86-92, January.
    3. E. Neal Blue & Luther Tweeten, 1997. "The estimation of marginal utility of income for application to agricultural policy analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 16(3), pages 155-169, August.
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    Cited by:

    1. Jinchi Dong & Richard S. J. Tol & Fangzhi Wang, 2024. "Towards a representative social cost of carbon," Papers 2404.04989, arXiv.org.
    2. Ferda Halicioglu & Cevat Karatas, 2013. "A social discount rate for Turkey," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(2), pages 1085-1091, February.
    3. David J. EVANS, 2006. "Social discount rates for the European Union," Departmental Working Papers 2006-20, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    4. Akbulut, Hale & Seçilmiş, Erdem, 2019. "Estimation of a social discount rate for Turkey," Socio-Economic Planning Sciences, Elsevier, vol. 67(C), pages 78-85.
    5. Raúl Castro & Jorge Armando Rueda Gallardo, 2020. "Estimación Empírica de la Tasa Social de Descuento Estudio de Caso Bolivia," Documentos CEDE 18020, Universidad de los Andes, Facultad de Economía, CEDE.
    6. Jan Kubíček & Leoš Vítek, 2010. "Hodnocení veřejných projektů z hlediska společenské míry diskontace [Evaluation of Public Projects from the Viewpoint of Social Rate of Discount]," Politická ekonomie, Prague University of Economics and Business, vol. 2010(3), pages 291-304.
    7. Lopez, Humberto, 2008. "The social discount rate : estimates for nine Latin American countries," Policy Research Working Paper Series 4639, The World Bank.
    8. Samih Antoine Azar & Vera Karaguezian-Haddad, 2014. "Simulating the market coefficient of relative risk aversion," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-7, December.
    9. Massimo Florio & Emanuela Sirtori, 2013. "The social cost of capital: recent estimates for the EU countries," Working Papers 201303, CSIL Centre for Industrial Studies.
    10. Samih Azar, 2011. "Retesting the CCAPM Euler equations," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 7(4), pages 324-346, September.
    11. Mareike Schad & Jürgen John, 2012. "Towards a social discount rate for the economic evaluation of health technologies in Germany: an exploratory analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(2), pages 127-144, April.

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