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Declining Discount Rates: Evidence from the UK

Author

Listed:
  • Ekaterini Panopoulou

    (Department of Banking and Financial Management, University of Piraeus and Department of Economics, Maynooth)

  • B. Groom

    (Department of Economics, University College London, UK.)

  • P. Koundouri

    (Department of Economics, University of Reading, UK and Department of Economics, UCL, UK)

  • Theologos Pantelidis

    (Department of Banking and Financial Management, University of Piraeus, Greece.)

Abstract

We estimate schedules of declining discount rates for cost benefit analysis in the UK. We highlight the importance of model selection for this task and hence for the evaluation of long-term investments, namely climate change prevention and nuclear build.

Suggested Citation

  • Ekaterini Panopoulou & B. Groom & P. Koundouri & Theologos Pantelidis, 2005. "Declining Discount Rates: Evidence from the UK," Economics Department Working Paper Series n1470105, Department of Economics, National University of Ireland - Maynooth.
    • Handle: RePEc:may:mayecw:n1470105
    as

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    References listed on IDEAS

    as
    1. David Pearce & Ben Groom & Cameron Hepburn & Phoebe Koundouri, 2003. "Valuing the Future: Recent advances in social discounting," DEOS Working Papers 0308, Athens University of Economics and Business.
    2. Gollier, Christian, 2002. "Time Horizon and the Discount Rate," Journal of Economic Theory, Elsevier, vol. 107(2), pages 463-473, December.
    3. Newell, Richard G. & Pizer, William A., 2003. "Discounting the distant future: how much do uncertain rates increase valuations?," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 52-71, July.
    4. Gollier, Christian, 2002. "Discounting an uncertain future," Journal of Public Economics, Elsevier, vol. 85(2), pages 149-166, August.
    5. Weitzman, Martin L., 1998. "Why the Far-Distant Future Should Be Discounted at Its Lowest Possible Rate," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 201-208, November.
    6. David Pearce & Ben Groom & Cameron Hepburn & Phoebe Koundouri, 2003. "Valuing the Future," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 4(2), pages 121-141, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    long-run discounting; state-space models; regime-switching models; climate change policy; nuclear build;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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