I review the justifications given for discounting future benefits relative to present, and distinguish between the pure rate of time preference, or utility discount rate, and the consumption discount rate, also sometimes known as the social rate of discount. I discuss when to choose one or the other, and how to choose a discount rate in a real-world project.
"Discounting: A Review of the Basic Economics,"
University of Chicago Law Review: Vol. 74
, Article 5.
Available at: http://chicagounbound.uchicago.edu/uclrev/vol74/iss1/5