Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: The main aim of the study is to advice the Swedish national guidelines on cost-benefit analysis (CBA) of transport infrastructure investments, ASEK about the appropriate set of discount-rates (currently 3.5% for all investments). To this end, first a literature review with a theoretical focus along with some new perspectives are provided. Second the conclusions are applied to Swedish infrastructure transport CBA, using the current proposition of a new HSR line as a case. Based on empirical research concerning parameter values new discount rates are estimated, and sensitivity analysis performed. The best estimate of the social discount rate in the present study, for land transport infrastructure investment in Sweden, is about 5.1%.

Keywords: Discount rate; Cost-benefit analysis; Social time preference; Social opportunity cost; Risk

JEL-codes: D61; G11; H43; H54

41 pages, First version: December 14, 2018. Revised: December 5, 2019.

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Asplund%20Discount%20CBA5%20updated%20WP.pdf  Full text

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