Name | Description | References |
Discounting | Economists typically use a discounting function to decrease the importance of effects occurring further in the future. The most common functional form is exponential. Here there are debates about the appropriate discount rate to apply in that model, with most people arguing a rate somewhere between 0 and 10% being correct (see e.g. Stern 2006). |
Related decision tree of the Pathfinder:
Decision tree: Valuation in section Formal decision making |
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Decision tree: Valuation in section Impact analysis |
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