eprintid: 46953
rev_number: 12
eprint_status: archive
userid: 1482
importid: 105
dir: disk0/00/04/69/53
datestamp: 2023-03-03 09:44:01
lastmod: 2023-07-18 12:01:40
status_changed: 2023-07-18 12:01:40
type: article
succeeds: 28313
metadata_visibility: show
creators_name: Cherbonnier, Frédéric
creators_name: Gollier, Christian
creators_id: frederic.cherbonnier@tse-fr.eu
creators_id: Christian.Gollier@ut-capitole.fr
creators_idrefppn: 14447154X
creators_idrefppn: 03126123X
creators_affiliation: Toulouse School of Economics
creators_affiliation: Toulouse School of Economics
creators_halaffid: 1002422
creators_halaffid: 1002422
title: Risk-adjusted Social Discount Rates
ispublished: pub
subjects: subjects_ECO
abstract: When evaluating public and private investment projects, those that contribute more to the collective risk should be more penalized through an upward adjustment of their discount rate. This paper shows how to estimate the risk-adjusted discount rate for different projects, with applications to the electricity sector. Using the standard framework of consumer theory, we express any investment project's beta in terms of the easier-to-measure price and income elasticities of the goods generated by the project. When considering an investment in production capacity, the beta has a flat term structure, and is positive (negative) for normal (inferior) goods. When considering core infrastructures carrying goods or services, such as energy transmission and distribution assets, the beta has a decreasing term structure with very high values at short horizons for infrastructures facing capacity constraints. We provide a real-case example of a cross-border electricity connection with negative beta for the exporting country.
date: 2022-10
date_type: published
publisher: Oelgeschlager, Gunn & Hain
id_number: 10.5547/01956574.43.4.fche
official_url: http://tse-fr.eu/pub/127912
faculty: tse
divisions: tse
language: en
has_fulltext: TRUE
doi: 10.5547/01956574.43.4.fche
view_date_year: 2022
full_text_status: public
publication: Energy Journal
volume: vol. 43
number: n° 4
refereed: TRUE
issn: 0195-6574
oai_identifier: oai:tse-fr.eu:127912
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oai_lastmod: 2023-06-26T11:48:18Z
oai_set: tse
site: ut1
hal_id: hal-04012977
hal_passwd: t&&sjnl
hal_version: 1
hal_url: https://hal.science/hal-04012977
citation:   Cherbonnier, Frédéric <https://www.idref.fr/14447154X> and Gollier, Christian <https://www.idref.fr/03126123X>  (2022) Risk-adjusted Social Discount Rates.    Energy Journal, vol. 43 (n° 4).        
document_url: https://publications.ut-capitole.fr/id/eprint/46953/1/wp_tse_972.pdf