Why are social discount rates so important

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1. Why are social discount rates (SDRs) so important?

2.What are the major issues involved in the selection of the social discount rate?

3. Is the market rate of interest a good estimate of the social MRTP?

4. Compare and contrast the three main methods of calculating the SDR.

5. It has been claimed that "The principle of revealed preference has been oversold, in particular when used to justify use of the market interest rate in evaluating social investments." How might this be correct? For example, we use SDR to value the future, but should/can we include the values of the past in making future valuations?

6. If an optimal policy turns on how the CBA analyst should weigh the perspectives of individuals in various time periods, then how should disagreements among their temporal selves get resolved?

Reference no: EM133081855

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