<abstract xmlns="http://www.w3.org/1999/xhtml"><bold>Research background:</bold> An investment appraisal applies a single discount rate across all effects. However, this may be insufficient for heterogenous environmental impacts, mixing private and public goods as well as use and non-use values, where individuals may have multiple intertemporal preferences due to their duality to act as consumer or citizen.<bold>Purpose:</bold> The paper aims at identifying the scope of discrepancies in the level of discount rate for public and private as well as use-and non-use investment gains.<bold>Research methodology:</bold> The contingent valuation method is used to elicit stated discount rates for 2 hypothetical investments: environmental or financial gains to distinguish between public and private domain accompanied by two time-frames: short (use values) and long (non-use values).<bold>Results:</bold> The discount rate for the environment is lower than for money. It is also lower for the long-term horizon in comparison with the short-term perspective. The discrepancies are observed also for explanatory variables in respect to a socio-economic profile and attitude characteristics.<bold>Novelty:</bold> The paper adds to the discussion on valuation discrepancies between self-interested consumers and socially oriented citizens. The scarcity of previous research examining discount rates for public/private goods as well as the short/long-time horizon make the results relevant for public policy dealing with climate change and environmental protection, providing an insight into individual intertemporal preferences.</abstract>

Research background: An investment appraisal applies a single discount rate across all effects. However, this may be insufficient for heterogenous environmental impacts, mixing private and public goods as well as use and non-use values, where individuals may have multiple intertemporal preferences due to their duality to act as consumer or citizen.Purpose: The paper aims at identifying the scope of discrepancies in the level of discount rate for public and private as well as use-and non-use investment gains.Research methodology: The contingent valuation method is used to elicit stated discount rates for 2 hypothetical investments: environmental or financial gains to distinguish between public and private domain accompanied by two time-frames: short (use values) and long (non-use values).Results: The discount rate for the environment is lower than for money. It is also lower for the long-term horizon in comparison with the short-term perspective. The discrepancies are observed also for explanatory variables in respect to a socio-economic profile and attitude characteristics.Novelty: The paper adds to the discussion on valuation discrepancies between self-interested consumers and socially oriented citizens. The scarcity of previous research examining discount rates for public/private goods as well as the short/long-time horizon make the results relevant for public policy dealing with climate change and environmental protection, providing an insight into individual intertemporal preferences.

The Dilemmas of Public Vs. Private Goods Discounting for Long-Term Investment Appraisal: The Puzzle of Citizen and Consumer Approaches to Valuation

College of Finance, Department of Investment

Folia Oeconomica Stetinensia

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Research background: An investment appraisal applies a single discount rate across all effects. However, this may be insufficient for heterogenous...

The Dilemmas of Public Vs. Private Goods Discounting for Long-Term Investment Appraisal: The Puzzle of Citizen and Consumer Approaches to Valuation

Data publikacji: 29 sty 2021

Zakres stron: 114 - 133

Otrzymano: 16 mar 2020

Przyjęty: 26 wrz 2020

DOI: https://doi.org/10.2478/foli-2020-0039

Słowa kluczowe
investment appraisal, valuation, discounting, citizen vs. consumer distinction

© 2020 Monika Foltyn-Zarychta, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The Dilemmas of Public Vs. Private Goods Discounting for Long-Term Investment Appraisal: The Puzzle of Citizen and Consumer Approaches to Valuation

Data publikacji: 29 sty 2021

Zakres stron: 114 - 133

Otrzymano: 16 mar 2020

Przyjęty: 26 wrz 2020

DOI: https://doi.org/10.2478/foli-2020-0039

Słowa kluczoweinvestment appraisal, valuation, discounting, citizen vs. consumer distinction

© 2020 Monika Foltyn-Zarychta, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Słowa kluczowe
investment appraisal, valuation, discounting, citizen vs. consumer distinction