Dec 6, 2018

What the "Social Discount Rate" Is and Why It Matters

A New Symposium Outlines Three Approaches to a Critical Public Policy Issue
James Broughel Senior Research Fellow

Today, the Mercatus Center is proud to announce the release of a symposium on the social discount rate. The social discount rate is a critical component of benefit-cost analysis, which analysts in the government use to determine whether policies and regulations do more good for society than harm.

The debate about the correct social discount rate is one that remains unresolved among economists. As readers of the essay series will come to understand, this controversy stems in part from disagreement about what the proper goals of public policy should be. Some economists aim for an efficient allocation of resources, while others seek an equitable distribution of wealth in society. These disputes tend to play out as part of the ongoing saga about what is the proper discount rate in benefit-cost analysis.

This Mercatus symposium explores these subjects and more. Our hope is that symposium provides some much-needed transparency to a topic that is widely misunderstood. The essays lay a foundation for further discussion about this critical input in policy analysis.

To read the symposium essays, visit the Mercatus Center website.

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