Talk:Discount rate: Difference between revisions
imported>Anh Nguyen mNo edit summary |
imported>Nick Gardner No edit summary |
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I can try to work again on that article ASAP I've a little more time. | I can try to work again on that article ASAP I've a little more time. | ||
I do agree it is a very important article.. do you have any ideas that we could devellop? [[User:Anh Nguyen|Anh Nguyen]] 08:30, 5 December 2007 (CST) | I do agree it is a very important article.. do you have any ideas that we could devellop? [[User:Anh Nguyen|Anh Nguyen]] 08:30, 5 December 2007 (CST) | ||
This has become a complicated and controversial subject and it will be difficult to create a balanced and informative article (if I were to tackle it, I should have to do some serious reading and thinking). | |||
However, it should at minimum say how to chose the appropriate rate. | |||
It could, for example, say that | |||
*for an individual evaluating a personal investment it should (as you note) be the riskless interest rate that he could get, for example, from a savings account; | |||
*for a company it should be its weighted average cost of capital; | |||
*for government investment it should perhaps be determined by the need to avoid "crowding out" other projects | |||
*for cost/benefit analysis it should be the social time preference rate of those affected (and it is how that should be determined that has become controversial.) | |||
I think we should cover the first three of the above fairly soon and perhaps tackle the detail of the fourth later. | |||
However we '''should not''' in my view approve the use of a low discount rate for climate change solely on the grounds that to do otherwise gives an implausible result - the removal of that implication is a matter for early action. | |||
[[User:Nick Gardner|Nick Gardner]] 11:21, 25 February 2008 (CST) | |||
Revision as of 11:21, 25 February 2008
Is anyone planning to develop this article? It seems too important a subject to deal with so briefly, and there is so much that needs to be said. Nick Gardner 04:15, 5 December 2007 (CST)
I can try to work again on that article ASAP I've a little more time.
I do agree it is a very important article.. do you have any ideas that we could devellop? Anh Nguyen 08:30, 5 December 2007 (CST)
This has become a complicated and controversial subject and it will be difficult to create a balanced and informative article (if I were to tackle it, I should have to do some serious reading and thinking). However, it should at minimum say how to chose the appropriate rate.
It could, for example, say that
- for an individual evaluating a personal investment it should (as you note) be the riskless interest rate that he could get, for example, from a savings account;
- for a company it should be its weighted average cost of capital;
- for government investment it should perhaps be determined by the need to avoid "crowding out" other projects
- for cost/benefit analysis it should be the social time preference rate of those affected (and it is how that should be determined that has become controversial.)
I think we should cover the first three of the above fairly soon and perhaps tackle the detail of the fourth later.
However we should not in my view approve the use of a low discount rate for climate change solely on the grounds that to do otherwise gives an implausible result - the removal of that implication is a matter for early action.
Nick Gardner 11:21, 25 February 2008 (CST)