Talk:Discount rate
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)
Subject to further comments, I now propose to revise this article to include the four issues referred to above and to introduce the effect of the elasticity of the marginal utility of consumption (as used in the Stern Report) and its consequences for intergenerational cost/benefit comparisons. In doing so, I would adopt the current practice of placing mathematical equations and complex verbal reasoning on the tutorials subpage (which would, I suspect, become rateher substantial). I will await comments before starting any drafting. Nick Gardner 05:43, 22 August 2008 (CDT)
The statement that some content is from Wikipedia is incorrect but appears to be impossible to delete. Nick Gardner 13:25, 26 August 2008 (CDT)
- Done (with a lot of effort). There is a check box for Content from WP, when you save a revision. Martin Baldwin-Edwards 02:48, 31 August 2008 (CDT)