APPROACHES TO MEASURING SOCIAL DISCOUNT RATE:A BANGLADESH PERSPECTIVE

Outline

1. Introduction
2. A Review of Literature
3. Methods and Data
4. Social Discounting for Bangladesh: Results and Interpretation
5. Policy Implications
6. Conclusion

APPROACHES TO MEASURING SOCIAL DISCOUNT RATE:A BANGLADESH PERSPECTIVE

Author: Mohammad Muaz Jalil

DOI Link: https://www.doi.org/10.56888/BIISSj2012v33n4a4

ABSTRACT

Social discount rate reflects a society’s relative valuation on today’s well-being versus well-being in the future. This paper reviews various methods of measuring social discount rate, with particular emphasis on social rate of time preference and social opportunity cost of capital framework. Then Monte Carlo Simulation is conducted for Bangladesh to understand the optional social discount rate. The result suggests that the Government of Bangladesh should use a valuebetween9-11per cent as optimal social discount rate for various long term projects. The discount rate is similar to the ones used by Pakistan, India and China.

BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

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