Lopez, Humberto2012-05-302012-05-302008-06https://hdl.handle.net/10986/6659The social discount rate measures the rate at which a society would be willing to trade present for future consumption. As such it is one of the most critical inputs needed for cost-benefit analysis. This paper presents estimates of the social discount rates for nine Latin American countries. It is argued that if the recent track record in terms of growth in the region is indicative of future performance, estimates of the social discount rate would be in the 3-4 percent range. However, to the extent that the region improves on its past performance, the social discount rate to be used in the evaluation of projects would increase to the 5-7 percent range. The paper also argues that if the social planner gives a similar chance to the low and high growth scenario, the discount rate should be dependent on the horizon of the project, declining from 4.4 percent for a 25-year horizon to less than 4 percent for a 100-year horizon.CC BY 3.0 IGOALTERNATIVE USEAVERAGE GROWTHAVERAGE GROWTH RATEAVERAGE TAX RATESCALCULATIONCALCULATIONSCOMMODITYCOMMODITY PRICESCONSUMERSCOST EFFECTIVENESSCOUNTRY LEVELCROSS COUNTRYDENSITY FUNCTIONDERIVATIVESDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPMENT INDICATORSDISCOUNT RATEDISCOUNT RATESECONOMETRIC MODELSECONOMIC ANALYSISECONOMIC GROWTHECONOMIC LITERATUREECONOMIC REVIEWECONOMICSECONOMICS LETTERSECONOMICS LITERATUREELASTICITYEMPIRICAL ESTIMATESEMPIRICAL LITERATUREEMPIRICAL STUDIESEMPIRICAL WORKSEXPECTED VALUEEXPENDITUREFINANCIAL SECTORSFORECASTSFUTURE GROWTHFUTURE INCOMEGDPGOVERNMENT BONDSGROWTH LITERATUREGROWTH MODELSGROWTH PROJECTIONSGROWTH PROSPECTSGROWTH RATEGROWTH RATESHIGH GROWTHHIGH INCOME COUNTRIESHISTORICAL GROWTHINCOME DISTRIBUTIONINCOME LEVELINCOME LEVELSINCOME TAXINTEREST RATEINTEREST RATESINTERNATIONAL BANKINVESTMENT PROGRAMSLATIN AMERICANLIFE SPANLIFETIMESLONG RUNLOWER INTEREST RATELUMP SUMMARGINAL TAXMARGINAL TAX RATEMARGINAL TAX RATESMARGINAL UTILITYMARGINAL UTILITY OF CONSUMPTIONMORTALITY RATESOPPORTUNITY COSTPER CAPITA CONSUMPTIONPER CAPITA CONSUMPTION GROWTHPER CAPITA GROWTHPER CAPITA GROWTH RATEPER CAPITA INCOMEPER CAPITA INCOME LEVELPER CAPITA INCOME LEVELSPERSONAL INCOMEPOINT ESTIMATESPOLICY MAKERSPOLICY MAKINGPOLICY RESEARCHPOLITICAL ECONOMYPOSITIVE IMPACTPRIVATE INVESTMENTPRIVATE SECTORPROBABILITYPRODUCTION FUNCTIONSPUBLIC EXPENDITUREPUBLIC FINANCEPUBLIC GOODSPUBLIC INVESTMENTPUBLIC POLICIESPUBLIC SECTORPUBLIC SECTOR BORROWINGPUBLIC SPENDINGRATE OF INTERESTRATE OF RETURNREAL RATERISK AVERSIONSAVINGSSAVINGS BEHAVIORSAVINGS PROGRAMSIGNIFICANT DIFFERENCESTAXTAX RATETAX RATESTAX REGIMETREASURYUTILITY FUNCTIONWORTHSocial discount ratecost-benefit analysisWorld Bank10.1596/1813-9450-4639