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Title: Declining discount rates
Authors: Cropper, Maureen L.
Freeman, Mark
Groom, Ben
Pizer, William A.
Issue Date: 2014
Publisher: © American Economic Association
Citation: CROPPER, M.L. ... et al., 2014. Declining discount rates. American Economic Review, 104 (5), pp. 538 - 543.
Abstract: We ask whether the US government should replace its current discounting practices with a declining discount rate schedule, as the United Kingdom and France have done, or continue to discount the future at a constant exponential rate. We present the theoretical basis for a declining discount rate (DDR) schedule, but focus on how, in practice, a DDR could be estimated for use by policy analysts. We discuss the empirical approaches in the literature and review how the United Kingdom and France estimated their DDR schedules. We conclude with advice on how the United States might proceed to consider modifying its current discounting practices.
Description: This article was published in the American Economic Review [© American Economic Association] and the definitive version is available at: http://dx.doi.org/10.1257/aer.104.5.538
Version: Accepted for publication
DOI: 10.1257/aer.104.5.538
URI: https://dspace.lboro.ac.uk/2134/16716
Publisher Link: http://dx.doi.org/10.1257/aer.104.5.538
ISSN: 0002-8282
Appears in Collections:Published Articles (Business)

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