Social discount rate, The second discount rate is known as

Social discount rate

Reference no: EM1360011

The second discount rate is known as the social discount rate. It is based on judgments about the collective value that society attaches to a policy. Proponents argue that the social discount rate is preferred because it broadens the preferences considered. In some cases, the social discount rate will factor in the costs and benefits of a program to future generations. Opponents point to the irrationality and difficulty to measure intangible elements like the cost of pollution, or satisfaction, or other factors.

This may boil down to a left brain/right brain dilemma. Some of you are business managers or business-oriented people who usually subscribe to a quantitative focus. Others of you follow a qualitative (not quality) focus and believe that everything can be measured.

Where do you stand on this issue of a social discount rate? Briefly explain why.

Reference no: EM1360011

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