The appraisal of public investments is subject to formal guidelines which often require input prices, such as forecasted energy prices. Using Danish guidelines as a case study, we explore the discounting assumptions in these input prices and find rates ranging from 2.97% to 17.5%, markedly...

This paper makes the case for the systematic appraisal of public sector projects using shadow prices as the signals of social scarcities. In so doing, it attempts to redress the balance between estimating inputs and outputs, central though that task is, and valuing them correctly. The account of...

This paper uses the Kaldor-Hicks compensation principle to compute the present value (PV) of a non-marginal future event. Three theoretical results stand out: First, decreasing returns to capital create a wedge between the PV of future generations' willingness to pay (WTP) and the PV of their...

A social time preference methodology derived from Feldstein (1965) is applied to calculate social discount rates across 167 countries and across time from 2005-2050 for a country case (Brazil). This attempt seeks to compute comparable figures from a homogeneous dataset and provides a...

The social discount rate used in cost-benefit analysis (CBA) is an interest rate applied to benefits and costs that are expected to occur in the future in order to convert them into a present value. This conversion is done to ascertain what those benefits and costs are worth today. The social...

This paper explores the relevance of Bastiat's famous distinction between the seen and the unseen consequences of actions to modern debates about cost-benefit analysis. In cost-benefit analysis, the opportunity cost of capital describes the unseen future returns a capital asset generates....