Social interest rate for public sector appraisal in the United Kingdom, the United States and Canada
- 1 September 1987
- journal article
- public sector-economics
- Published by Taylor & Francis in Project Appraisal
- Vol. 2 (3) , 169-174
- https://doi.org/10.1080/02688867.1987.9726623
Abstract
The social interest rate (SIR) is an important parameter in project appraisal in public sector economics. In this article a SIR is derived for the United Kingdom, the United States and Canada on the basis of an individualistic and two-period consumption utility function. The model yields an operational formula the component parameters of which are: a mortality based pure time discount rate; the growth rate of per capita consumption, in real terms; and the elasticity of marginal utility of consumption. The final results are: the United Kingdom 2.6%, the United States 5.3% and Canada 5.4%.Keywords
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