Discounting benefits and costs

This chapter provides considerations in a cost–benefit analysis (CBA) framework of different discounting methodologies. It discusses the main models developed for discounting: zero, constant, and declining discount rates. The chapter also summarizes existing evidence on the issues associated with the measurability of time preferences and intergenerational discounting. The last section analyzes the consequences arising from the use of discounting in CBA and discusses the relevance of the uncertainty in an intertemporal framework and its impacts on the results.