Social discount rates for six major countries

Abstract

Social discount rates are estimated for six major economies: Australia, France, Germany, Japan, the UK and the USA. A common methodology based on social time preference is employed and the information required is taken from the same OECD database. The main policy implications of applying consistently measured discount rates in the context of social project appraisal are then discussed. This is an important matter because, up to now, these countries have set their official discount rates using strikingly different methods and such disparities may have resulted in inconsistent decision-making in relation to the allocation of funds to long-term social projects.