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A social discount rate for Turkey

Author

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  • Ferda Halicioglu

    ()

  • Cevat Karatas

    ()

Abstract

Social discount rate (SDR) is a very crucial policy parameter in public project appraisals due to its resource allocation impacts. If this rate is too high, future generations will face excess financial burden since distant cash flows will become negligible. If this rate is too low, ineffective projects are chosen creating an inefficient allocation of resources. This study estimates an SDR for Turkey using the social time preference rate (STPR) approach. The elasticity of the marginal utility consumption, which is the most important component of the STPR, is estimated econometrically from a demand for food approach during the period of 1980–2008. The overall result indicates that the SDR for Turkey is 5.06%. The European Union requires evaluation of the publicly supported commercial projects in terms of the SDR; hence the findings from this study can be used as a useful policy measurement for a full EU member candidate country, Turkey. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Ferda Halicioglu & Cevat Karatas, 2013. "A social discount rate for Turkey," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(2), pages 1085-1091, February.
  • Handle: RePEc:spr:qualqt:v:47:y:2013:i:2:p:1085-1091
    DOI: 10.1007/s11135-011-9585-z
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. HALICIOGLU, Ferda & Ketenci, Natalya, 2017. "Testing the Productivity Bias Hypothesis in Middle East Countries," MPRA Paper 83528, University Library of Munich, Germany.
    2. Ferda, HALICIOGLU & Kasim, EREN, 2013. "Testing Twin Deficits and Saving-Investment Nexus in Turkey," MPRA Paper 50098, University Library of Munich, Germany.
    3. Halicioglu, Ferda & Yolac, Sema, 2015. "Testing the impact of unemployment on self-employment: empirical evidence from OECD countries," MPRA Paper 65026, University Library of Munich, Germany.

    More about this item

    Keywords

    Social discount rate; Social time preference; Project appraisal; ARDL; Turkey;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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